Recent comments from Bank of Japan officials opened the door to further rate hikes, but fresh data may temper that stance.

Markets adopted a subdued tone this week as investors faced a limited flow of economic data. One notable development was news that US–India trade talks may become more complicated by the issue of India’s purchases of Russian oil – an unusual factor, given that such negotiations typically exclude third-party relationships.

The start of this week has brought with it a host of UK data that has allowed investors to speculate about the Bank of England’s interest rate decision on Thursday.

Trade figures for August between the United States and China suggested this week that global supply chains may be shifting in response to the latest round of American tariffs.

Eurozone inflation edged up to 2.1% in August, keeping it broadly in line with the European Central Bank’s 2% target after several months of stability.

Not long after President Trump imposed a 25% penalty on India over its purchases of Russian oil and weapons, a new wave of tariffs – this time 50% on Indian goods – come into force. Economists warn that such steep trade barriers could weigh heavily on Indian workers, many of whom are employed in labour-intensive export facing industries

This morning’s inflation data for the UK showed inflation came in hotter than expected for July, rising to 3.8% compared with 3.6% in June. The core rate also increased to 3.8%. A sharp rise in plane ticket prices accounted for a large share of the monthly increase, with fares jumping 30% due to the timing of the summer holiday season.

On Monday, the UK unemployment rate held steady at 4.7% in the three months to June. While the headline figure suggests stability, underlying data points to a gradual softening in the labour market, with payrolls falling for six consecutive months and job vacancies continuing to decline.

Some encouraging PMI data emerged from Asia this week. In Japan, services sector activity picked up pace in July, with the Services PMI rising to 53.6 from 51.7 in June, which marks the strongest expansion since February.

It has been a week of little economic data for markets to process. Euro area inflation currently stands at 2% – matching the ECB’s target.