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In the US the next Federal Open Market Committee meeting to discuss domestic monetary policy, and perhaps to implem...
In the US the next Federal Open Market Committee meeting to discuss domestic monetary policy, and perhaps to implement another interest rate rise is not until the 28 March.

Before that time a number of important economic indicators will have been released either confirming or dismissing the latest suggestion that US economic growth is beginning to slow.

January's employment data showed an unexpected rise in the US unemployment rate from 5.4% to 5.7%, seeming to defend the view that the US economy is losing momentum. However, last Friday US producer price data pointed to a persistence of inflationary pressures in the economy.

Beneath reports of modest growth in headline producer prices, the data upheld anecdotal evidence of a further intensification of pressures on crude and intermediate goods prices. (Prices of core and intermediate goods rose a full percentage point last month).

Retail sales data to be released today are likely to be critical to the consensus view of short-term US monetary policy. December's data showed a 0.1% fall in retail sales over the month.

Economists expect today's data to show a 0.3% rise in retail sales over the month, and perhaps a revision to December's fall. If the latest figures do confirm stronger growth and subsequent figures corroborate this evidence, another 50 basis point, (half a percentage point) rise in US interest rates at the next FOMC meeting is likely.

In the UK monetary policy continues to be guided by the level of inflation and the likelihood that the underlying rate, (excluding mortgage interest payments), remains within the lower half of the Bank of England's target range of 1% to 4%.

The bank currently expects inflation to rise above its central projection of 2.5% this year to fall back again by the end of the current parliament in 1997.

However, if their projections start to look unattainable another monetary policy move could be made at the next monetary meeting between the governor of the Bank of England and the chancellor at their next monetary meeting on 1 March

January's RPI is released tomorrow, and the market expects the underlying rate to rise from 2.5% to 2.8%.

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