The Bank of England has decided to maintain its interest rates at 5.25%, which is the highest level in 15 years. They are likely to keep rates steady until the latter half of next year when rate cuts are anticipated to begin. The vote last week resulted in a split of 6-3.

Concerns about inflationary pressures, particularly due to elevated wage growth, persist, while the growth outlook is notably weak. The Bank estimates that half of the tightening measures implemented so far have yet to fully impact the real economy.

Meanwhile, the US central bank has also decided to maintain its rates at a 22-year high. Market sentiment suggests that we may be at the peak of rates, leading to a more risk-friendly environment. Treasury yields experienced a significant drop, and equity markets rallied.

In the Eurozone, economic data is showing signs of improvement, but the underlying fundamentals remain weak, with a high risk of recession, even though headline inflation has fallen to a two-year low of 2.9%. Analysts predict that the central bank will keep interest rates at their current levels before becoming the first to start cutting rates, possibly as early as March next year.

In the foreign exchange markets, there has been some weakening of the US dollar following the Federal Reserve's decision. However, confidence levels are low. GBP/USD continues to exhibit volatility within a range of 1.2000 to 1.2500, while GBP/EUR has surpassed the psychologically significant 1.1500 level.

Looking ahead, we have a week filled with UK-focused economic data. The week kicks off with the Construction PMI on Monday morning, followed by Bank of England Governor Bailey's speech on Wednesday. The highlight of the week is expected to be on Friday, with UK GDP forecasted to turn negative. In the United States, there will be Initial Jobless Claims to watch out for on Thursday.