The Bank of England must contend with a slowdown in Britain's economy but also stubborn inflation pressures when it considers whether to cut interest rates in early February as well as its message about the outlook for the rest of the year.

Inflation is stuck above the BoE's 2% target and looks set to rise further while the economy has stagnated since the middle of 2024, offering conflicting signals for the central bank's rate-setters.

The Bank of England's first interest rate decision of 2025 will take place next week, and investors widely expect rate-setters to reduce borrowing costs for a third time.

ING is looking for three further cuts later this year, but a shaky jobs market and the prospect of lower services inflation risks pushing the BoE into more aggressive moves. Click to read.

Economic strength in the US relative to other major economies is likely to drive contrasting paths for interest rates worldwide.

What is the outlook of the ASX 200 index after the latest Australia consumer inflation data, which raised the odds of rate cuts

A raft of U.S. economic data will provide plenty for investors to watch out for in the coming week, including ISM data on manufacturing and services as well as closely-watched nonfarm payrolls figures for January.

The Core PCE Price Index, the Federal Reserve's preferred measure of inflation, increased 0.2% M/M in December, in line with the consensus estimate and ticking up from +0.1% in November, according to data released by the U.S. Commerce Department on Friday.

The European Central Bank cut its interest rate for the fifth time since last summer and its expected to ease borrowing at least another three times this year as it tackles ongoing economic weakness in its largest economies.

EUR/GBP offers its recent gains from the previous session, trading around 0.8360 during the Asian hours on Friday. The EUR/GBP cross depreciates as the Euro struggles amid increased expectations of further interest rate cuts by the European Central Bank (ECB).

The Federal Reserve's preferred measure of inflation picked up in December, pushing the central bank's goal of a 2% annual rate farther into the distance.

The Federal Reserve’s preferred inflation gauge moved even higher in December, driven in part by rising food and energy prices. However, a closely watched measurement of underlying inflation trends indicated some progress in the fight to rein in price hikes.