BANKING ON INFLATION THAT NEVER COMES:

British Cut Interest Rates in Response to Slowing Economy (GRAHAM BOWLEY, 8/04/05, International Herald Tribune)

The Bank of England cut British interest rates for the first time in more than two years today to accommodate a sharply slowing economy, while the European Central Bank left interest rates in the euro zone alone.

The 0.25 percentage point cut in British rates, to 4.5 percent, was a response to weaker consumer spending, which has led to a marked slowdown this year in growth, economists said. During the second quarter, Britain's economy grew at its slowest annual rate in 12 years.

U.S. job growth unexpectedly strong in July (Reuters, 8/05/05)

U.S. job growth picked up last month as employers added 207,000 workers to their payrolls, a healthy gain that outstripped Wall Street expectations, a government report showed on Friday.

The unemployment rate held steady at the 2-3/4-year low of 5 percent reached in June, the Labor Department said.

Posted by Orrin Judd at August 5, 2005 9:21 AM