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Economists interviewed by Reuters said the first interest rate hike in nearly a decade by the Federal Reserve remains possible despite the soft inflation figures since other indicators point to a strengthening economy such us an improving housing sector and tightening labor market.

UK interest rates have been held at 0.5 per cent again by the Bank of England’s Monetary Policy Committee (MPC).

Core inflation in July, stripping out volatile energy, food and tobacco prices, rose to 1.2% – its highest rate since February.

But Governor Mark Carney has signaled the bank is “moving closer” to a rate increase as economic growth remains among the fastest among advanced economies.

After China’s surprise devaluation of the yuan, U.S. financial markets have slightly pushed rate hike expectations to December. Neither of these has reached a satisfactory level by Fed measures.

Similarly, factory output growth dropped in May, but the point to note is that it has now been positive for five months in a row, and the average growth since January at 3.5% is much higher than what we had seen in the second half of past year.

Monthly job growth has averaged 211,286 so far this year, a level suggesting employers are confident the economy will continue to expand and require more workers. At 62.6%, it remains at levels not seen since the late 1970s.

In July, the US economy added 215,000 jobs while the unemployment rate held steady at 5.3%.

The unemployment rate is forecast to hold steady at a seven-year low of 5.3 percent, near the 5.0 percent to 5.2 percent range most Fed officials think is consistent with a steady but low level of inflation.

Euro zone bond yields stabilised on Thursday, after a sharp rise the previous day fuelled by concern that the Federal Reserve and the Bank of England were heading for their first interest rate increases in nearly a decade.

The central bank on Tuesday kept the repo rate, or the rate at which it lends money to commercial banks, unchanged at 7.25%, and the cash reserve ratio, or the amount of funds that the banks have to keep with the Reserve Bank of India (RBI), at 4%.

“From the RBI’s side, we wanted to ensure the structure should ensure continuity in policy as the market attempts to understand the voting patterns of new MPC members”, he said.

“Most peoples’ expectations are that we’re going to get a hike by the end of the year, and the Fed [statement] today didn’t do anything to change that narrative”, said Joe Bell, a Cincinnati-based senior equity analyst at Schaeffer’s Investment...

And the FOMC’s largely upbeat policy statement suggests the economy is on track to meet those conditions. However, the latest statements from the US Federal Reserve also signal that a US interest rate hike is coming closer, hence giving rise to a stronger US dollar at the...

The only question seems to be when.