Economists expect the Bank of England to hold rates at 5.00% and the ECB is expected to hold rates at 4.00%.

Howard Archer, chief UK & European economist from Global Insight, said in a research note that with the recent weaker data, he is leaning more towards the central bank cutting 25 basis points, bringing rates to 4.75% despite higher inflation.

"Next Thursday's interest rate decision from the Bank of England is becoming a closer call by the day. Recent weak data and survey evidence relating to consumer confidence, retail sales, the housing market and manufacturing activity heightens concern that the UK economic downturn is deepening and adds to the pressure on the Bank of England to quickly cut interest rates again despite current elevated inflation levels and risks," he wrote.

According to economists at Capital Economics, the ECB interest rate being held at 5.00% is a foregone conclusion. They will, however, be more interested in what Trichet has to say, adding they expect him to continue his "hawkish stance" at the press conference following the ECB decision.

"While the main emphasis at the press conference will be on the upside risks to inflation, we might also hear a little more about the downside risks to growth. In particular, M. Trichet could again voice concern over the euro's strength," they wrote in their note. "Also, look out for any hints about the contents of the forthcoming Bank Lending Survey, which is likely to suggest that credit conditions are tightening further."

Markets will be interested to receive European retail sales figures for March, which are expected to rise 0.3% following February's decline of 0.3%. The annualized rate is expected to fall 0.2% following a previous decline of 0.2%

In a client note, economists from Citigroup said the early Easter holiday could have led to the recovery in sales. They added, despite a rise in March, as a whole retail sales remain weak.

"We expect a recovery in March, partly reflecting a temporary boost from the unusually early Easter holidays," the economists wrote. "However, the sharp fall in Spanish March retail sales and the renewed drop in the retail PMI in March and the new record low of this index in April suggest that underlying business in the retail sector is weak."

All times in EST.

Sunday: Ahead of the BOE interest rate decision, markets will receive the UK Times Bank of England shadow MPC report. The consensus is for the Bank to hold rates at 5.00%.

4-May UK Bank of England Shadow MPC Report

Monday: Markets will be interested to receive the results from the meeting from the Bank of International Settlements, which will be held in Basel, Switzerland.

2:00 EU Bimonthly Meeting of Bank for International Settlements

Tuesday: Markets will get important data with the release of German, European and UK PMI.

The final print for German PMI services is expected remain unchanged at 54.6. The final print of the euro zone PMI services is also expected to remain unchanged at a level of 51.8. Economists forecast the PMI composite to also remain steady at 51.9.

Also from Europe is the PPI data for March, which is expected to rise 0.7% following February's rise of 0.6%. The consensus for the annualized rate is for a rise of 5.6% following February's increase of 5.3%.

In the UK, PMI services for April are expected to come in at a level of 51.7 down from March's reading from 52.1.

Finally, markets also receive UK nationwide consumer confidence, which is expected to come in at 74.0, down from March's reading of 77.0

2:45 EU ECB's Ordonez Speaks at ADB Meeting in Madrid

4:00 EU German PMI Services April Final Exp: 54.6 Prior: 54.6

4:00 EU PMI Services April Final Exp: 51.8 Prior: 51.8

4:00 EU PMI Composite April Final Exp: 51.9 Prior: 51.9

4:15 EU Bank of Spain's Malo de Molina Speaks in Madrid

4:30 UK PMI Services April Exp: 51.7 Prior: 52.1

4:30 UK Official Reserves (Changes) April Prior: $45M

5:00 EU Euro-Zone PPI (Monthly) March Exp: +0.7% Prior: +0.6%

5:00 EU Euro-Zone PPI (Annualized) March Exp: +5.6% Prior: +5.3%

9:30 EU European Parliament Committee Votes on Breaking Up Power Companies

13:30 EU ECB's Tumpel-Gugerell Holds Speech in Brussels

19:01 UK Nationwide Consumer Confidence April Exp: 74 Prior: 77

Wednesday: It's another busy day in Europe with the release of euro zone retail sales, which economists forecast to rise 0.3% following February's decline of 0.5%.

In the UK, markets will receive industrial production for March, with the consensus calling for a decline of 0.1% following February's rise of 0.3%. The annualized rate is expected to rise 0.8% following February's increase of 1.3%.

In Germany, March factory orders are expected to rise 0.3% following a 0.5% fall in February. The annualized rate is expected to increase 6.0% following February's rise of 9.0%

3:00 EU ECB's Bini Smaghi, Stark Hold Speeches in Frankfurt

4:00 EU EU Lawmaker Speaks About Breaking Up Power Companies

4:30 UK Industrial Production (Monthly) March Exp: -0.1% Prior: +0.3%

4:30 UK Industrial Production (Annualized) March Exp: Exp: +0.8% Prior: +1.3%

4:30 UK Manufacturing Production (Monthly) March Exp: Unchanged Prior: +0.4%

4:30 UK Manufacturing Production (Annualized) March Exp: +1.2% Prior: +1.9%

5:00 EU Euro Zone Retail Sales (Monthly) March Exp: +0.2% Prior: -0.5%

5:00 EU Euro Zone Retail Sales (Annualized) March Exp: 0.7% Prior: -0.2%

5:30 UK BRC April Shop Price Index

6:00 EU German Factory Orders (Monthly) (SA) March Exp: +0.3% Prior: -0.5%

6:00 EU German Factory Orders (Annualized (NSA) March Exp: +6.0% Prior: +9.0%

10:30 EU EU's Almunia Releases `EMU@10' Report on Euro's First Decade

19:01 UK NIESR GDP Estimate April Prior: 0.5%

7-16 May EU German Wholesale Price Index (Annualized) April Exp: 6.7% Prior: +7.1%

7-16 May EU German Wholesale Price Index (Monthly) April Exp: 0.5% Prior: +1.6%

Thursday: All eyes will be on the central banks in Europe and the UK for their interest rate decision.

Economists expect the Bank of England to hold rates steady at 5.00%.

Turing to the euro zone, economists expect the ECB to continue to hold rate rates at 4.00%. Markets will also be listening to what ECB President Jean-Claude Trichet has to say at his press conference following the interest rate announcement.

Ahead of the central bank announcements will be German trade data. Imports are forecasted to fall 0.4% following February's revised decline of 0.6%. Exports are expected to remain unchanged following February's revised dip of 0.2%.

2:00 EU German Trade Balance March Exp: 16.8B Prior: 16.9B

2:00 EU German Current Account (EURO) March Exp: 16.2B Prior: 15.4B

2:00 EU German Imports (Monthly) (SA) March Exp: -0.5% Prior: -0.4% Revised: -0.6%

2:00 EU German Exports (Monthly) SA) March Exp: 0.5 Prior: 0.0 Revised: -0.2%

6:00 EU German Industrial Production (Annualized (NSA WDA) March Exp: +4.8% Prior: +6.1%

6:00 EU German Industrial Production (Monthly) (SA) March Exp: -0.5% Prior: +0.4%

7:00 UK Bank of England Interest Rate Decision Exp: 5.00% Prior: 5.00%

7:45 EU European Central Bank Announces Interest Rates 8-May Exp: 4.00% Prior: 4.00%

8:30 EU ECB's Trichet to speak at monthly press conference

7-16 May EU German Wholesale price Index (Annualized) April Exp: +6.7% Prior: +7.1%

7-16 May EU German Wholesale Price Index (Monthly) April Exp: +0.5% Prior: +0.5%

Friday:

No major data in the UK or Europe is expected to be released on Friday.

7-16 May EU German Wholesale price Index (Annualized) April Exp: +6.7% Prior: +7.1%

7-16 May EU German Wholesale Price Index (Monthly) April Exp: +0.5% Prior: +0.5%

By Neils Christensen, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Stephen Huebl, This email address is being protected from spam bots, you need Javascript enabled to view it