Daily Economic Outlook: 8th October 2015

The Bank of England is universally expected to leave rates unchanged today, but the simultaneous publication of the meeting minutes and the vote split will provide a ready sense of how the perceived balance of risks is shifting in the eyes of the MPC. The Blue Book revisions for the latest GDP estimates revised lower the most recent growth momentum and, by implication, suggest less productivity growth and therefore stronger cost pressures. 

This raises the risk that another MPC member may join Ian McCafferty in voting for an immediate rate rise, supported also by sterling's fall over the past month which would help to ease deflation concerns. On balance, though, an unchanged 8-1 vote split is the most likely outcome. With anxieties about the external backdrop providing an offset, scheduled MPC appearances in Lima this evening include Governor Carney and Deputy Governor Shafik.

In the eurozone, the minutes of the ECB's last meeting on 3 September could attract some attention, especially if further policy stimulus options are discussed, though they are more likely to reiterate that the Governing Council stands ready to act should conditions warrant it, says Lloyds Bank. 

German trade data this morning are expected to show a fall in exports and they follow recent disappointingly weak 'hard' data, including retail sales, factory orders and industrial production. ECB Chief Economist Praet is scheduled to speak today, as are the US Federal Reserve's Bullard, Kocherlakota and Williams. The FOMC minutes are also due and will be read in the context of the more recent soft US labour market data.