Year-over-year, the consensus forecast is calling for an increase of 1.5%, down notably from the 3.1% rise observed in May.

It's a busy day in the UK with markets waiting for the minutes from the Bank of England monetary policy meeting from the July 10 meeting.

Benjamin Reitzes from BMO Capital Markets expects dovish commentary from the Bank of England Minutes. "The vote was likely again 8-to-1, with Blanchflower the lone dissenter calling for a cut. The tone could be slightly more dovish, as growth is clearly slowing sharply, which will serve to keep a lid on wages and second-round effects despite rising headline inflation," wrote Reitzes.

Economists from Barclays Capital anticipate more dissenting views. "In the UK, we expect the minutes of the July MPC meeting to show that the Committee voted 8-1 to keep Bank Rate at 5%, with David Blanchflower having voted for a 25bp rate cut. However, given the unexpectedly high CPI print for June of 3.8% y/y, of which the MPC would have had a preview, we see a risk that one or two members (most likely Andrew Sentance and Timothy Besley) may have voted for a 25bp rate hike," wrote economists from Barclays.

Economists from Capital Economics expects the minutes to reflect discussion surrounding interest rates."It is possible that the minutes of July's MPC meeting will reveal some signs that the Committee has started to turn its attention away from whether interest rates need to rise and towards whether they need to fall further. For the first time, the minutes of June's meeting showed that some members discussed in detail the merits of raising interest rates. And since then, the news on producer price inflation, consumer price inflation and inflation expectations has deteriorated further. But this was largely expected. In that sense, the real 'news' over the last month has been the further deterioration in the outlook for growth and, in particular, the growing risk that the economy is heading for a recession. Accordingly, we suspect that the idea of a rate hike was dismissed more easily this month and that more attention fell on the case for lower interest rates," wrote economists from Capital Economics.

Italian retail sales data will also be released and are expected to show a decline of 0.1% in May on a monthly basis. April had seen no change in sales levels compared to the previous month.

In addition, Eurostat will report on euro zone industrial new orders for May. Economists are expecting orders levels to have slipped 1.0% in monthly terms after rising 2.5% in April.

Year-over-year, the consensus forecast is calling for a deceleration in the orders' growth rate to 3.2%, down from April's 11.7% jump.

All times in EDT

2:45 FR Consumer Spending (M/M) June Exp: -0.6% Prior: 2.0%

2:45 FR Consumer Spending (Y/Y) June Exp: +1.4% Prior: +3.1%

4:00 IT Retail Sales (M/M) (SA) May Exp: -0.1% Prior: 0.0%

4:00 IT Retail Sales (Y/Y) May Exp: -0.5% Prior: -2.3%

4:30 GB BBA Loans for House Purchase June Prior: 27968

4:30 GB Bank of England Minutes from Interest Rate Decision

5:00 EU Industrial New Orders (M/M) (SA) May Exp: -1.3% Prior: +2.5%

5:00 EU Industrial New Orders (Y/Y) May Exp: +2.1% Prior: +11.7%

6:00 UK CBA July Quarterly Industrial Trends

July 19-25 DE Import Price Index (M/M) June Exp: +1.0% Prior: +2.4%

July 19 - 25 DE Import Price Index (Y/Y) June Exp: +8.4% Prior: +7.9%

By Steve Stecyk, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it

CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca

The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.

A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.