MPC minutes and retail sales are the key domestic focus next week

Although the MPC appears to be leaning towards a more hawkish stance, the minutes of the July meeting (Wed) will probably still show unanimity to keep policy unchanged, not least because the meeting took place amid global uncertainties relating to Greece and the sharp correction in Chinese equities. Looking ahead, this is set to change and one could see the re-emergence of votes, from at least Weale and McCafferty, to increase interest rates in August. Note that from next month, the policy announcement, minutes and Inflation Report will all be released simultaneously, which could lead to some market volatility. It will also be David Miles's last meeting. UK June retail sales (Thu) will be the key data release and, based on anecdotal evidence of stronger sales and further discounting, it is believed a solid increase of 0.7% is expected, says Lloyds Bank.