Interest rate decisions on either side of the pond will take centre stage, while UK inflation figures will add further spice to a pivotal week of economic news.
Elsewhere there are also policy decisions from the Bank of Japan, Sweden's Riksbank, Norges Bank and Turkey Central Bank.
Fed time
On Wednesday, the US Federal Reserve is expected to leave interest rates unchanged after raising them to their highest level in 22 years in July.
The decision, the 11th increase since 2022, lifted the Federal Reserve's influential benchmark rate to a range of 5.25% to 5.5%.
Bank of America expects the Fed to maintain the target range for the federal funds rate at 5.25-5.5% at the September FOMC meeting, an outcome “consistent with both recent Fed communications and current market pricing”.
“The Fed is in data-dependent mode and the data flow since the July meeting largely supports a wait-and-see approach,” BofA said in a research note.
It expects Fed chair Jerome Powell's message "to be balanced and very similar to his comments at Jackson Hole, since the outlook has not fundamentally changed since late-August”.
BofA thinks Powell will reinforce the “job is not done on inflation” and say the Fed “will stay the course” in order to get inflation back to 2%.
It doesn’t expect any forward guidance on potential additional hikes.
ING Economics agrees. It expects to see the Fed leave interest rates on hold next week, although it thinks "the door will be left open for a potential future hike".
The CME Fed Watch tool puts a 97% probability that rates will be unchanged.
BoE to follow suit?
The Fed’s rate call will be followed by a similar decision in the UK on Thursday by the Bank of England’s Monetary Policy Committee.
Here, the consensus is tilting towards a 25 basis points (bps) rate increase which would be the 15th rise by the UK’s central bank.
However, economists reckon it could be 'one and done', the last rate increase of the current cycle.
Paul Dales, chief UK economist at Capital Economics, thinks that a 25 bps rise in interest rates, from 5.25% to 5.50% “will be the last hike in this cycle and that sticky inflation will force the Bank to keep rates at their peak until late in 2024”.
Bank of America predicts an 8-1 vote in favour of a 25 bps hike but added “skipping this month and revisiting the case for another hike in November, when the BoE will have a new set of forecasts and will have undertaken a review of the supply side of the economy, is far from unthinkable in our view”.
Martin Beck, chief economic advisor to the EY ITEM, thinks the MPC seems “destined to go for number 15 in this month’s meeting”.
But he reckons recent economic data means that decision looks much more finely balanced than only a few weeks ago.
That data includes a worse-than-expected gross domestic product reading in July which showed the UK economy contracted by 0.5%, compared to City expectations for a 0.2% fall.
The UK service sector is also showing signs of slowing while the jobs market is showing signs of creaking with vacancies falling and unemployment rising.
Ahead of the rate decision, the latest UK inflation figures will be released.
Pantheon Macroeconomics thinks the headline rate of CPI inflation will rise to 7.1% in August, from 6.8% in July, matching the MPC's forecast in last month's Monetary Policy Report.
It sees motor fuel CPI inflation rising sharply in August but food and core goods CPI inflation falling significantly, reflecting the BRC's shop price index.
But Goldman Sachs expects headline inflation to remain unchanged at 6.8% year on year with core inflation moderating to 6.7%, from 6.9% in July.
Within core inflation, it expects core goods inflation to decline by two-tenths to 5.7%, and services inflation to decrease by a tenth to 7.3%.
Otherwise, Monday sees the Rightmove house price index which will likely repeat the downbeat findings of other recent surveys on the housing market from Nationwide, Halifax and Rics.
Sweden, Norway, Tukey and Japan
Inflation is also uncomfortably high in Sweden, with the trade-weighted value of the krona back to lows, meaning the Riksbank is set for another hike.
ING thinks so and doesn’t rule out another by year-end, even though the economy is reacting to higher interest rates as GDP declines.
"While the Riksbank clearly isn't quite done with rate hikes, the fragile economic backdrop suggests we're near the peak," ING says.
Similarly, Norway's central bank has all but confirmed it intended to hike rates again this month, while its last recent interest rate projections back in June were before the recent rise in oil prices and falls in the krone.
Here's helpful ING again: "We suspect the bank’s new interest rate forecast, which will accompany next week’s decision, will at least flag a risk of another hike later this year. But for now, our base case is that the central bank remains on hold beyond September."
Turkey is expected to put the rest into the shade with a big hike to 30% from 25% currently, following the same sized move last month.
The Bank of Japan is an outlier, yet to either raise interest rates or throttle back quantitative easing as the monetary authority battles both the bond and currency markets.
Though the yen sliding and the BoJ has twice increased the ceiling for 10-year government bond yields that it is prepared to tolerate, albeit to just 0.50%, no change in the headline interest rate of minus 0.1% is expected.
Analysts at AJ Bell noted that the beleaguered Japanese yen is trading near twenty-five-year lows to the USD and is "catching a bit of a bid after comments from BoJ governor Kazuo Ueda that he could envisage a strong shuntō (spring wage negotiation season) in 2024.
"Some BoJ watchers interpreted this to mean Mr Ueda might be laying the groundwork for the long-awaited rate rise, which would be the first in Japan since February 2007."