European Central Bank meetings to set stage for parting of ways
LONDON - Reuters
![European Central Bank meetings to set stage for parting of ways](http://image.hurimg.com/i/hurriyet/75/0x0/59c8693445d2a027e83c1081.jpg)
The logo of the euro currency is seen in front of the European Central Bank.
After the Federal Reserve maintained its path towards raising U.S. interest rates next year,other major central banks will jostle for space on a crowded stage this week.
The European Central Bank, Bank of Japan, Bank of England and the central banks of India and Australia all hold meetings. While imminent action is unlikely, the time when policy settings start pointing in different directions is nearing.
U.S. growth rebounded in the second quarter and the Fed upgraded its assessment of the economy last week. It is on course to stop creating money in October but the expectation is that there will be no interest rate rise before mid-2015.
That puts the Bank of England in pole position to be the first major central bank to push rates up from their record low 0.5 percent, perhaps before the year is out.
The European Central Bank, which also meets on Aug. 7, faces a very different problem to the Bank of England.
Eurozone inflation has slipped further - to just 0.4 percent in July - and if it does not start picking up soon, the pressure to start printing money will grow despite strong reservations within the ECB’s Governing Council.
The Bank of Japan, meanwhile, will deliver its latest policy verdict on Aug. 8, following the sharpest fall in factory output since the devastating earthquake and tsunami of 2011.
With the BOJ already having created money at a furious rate, any policy shift is unlikely. But it may have to temper its assessment that production is “rising moderately as a trend,” toning down its upbeat language on the outlook.