It seems opinion is split with some calling for a rate cut and others of the opinion that the key driver behind the MPC’s caution is a fear that a rate cut could re-ignite the housing market. For now both policy makers and commentators alike will be watching the forthcoming data and attention will turn to the BoE’s next set of quarterly forecasts next week to judge which direction policy is heading.

In other UK news yesterday the global goods trade gap deficit unexpectedly widened slightly in December while the underlying goods gap hit a record. The global goods gap widened to £6.1 billion in December, higher than the £5.6 billion expected and slightly above the £6 billion in November.

Sterling fell a third of a cent against the dollar and hit a two week low against the euro after the numbers were released. The ONS said that using the Treasury’s estimate of growth the goods trade gap would amount to 5.4% of GDP, the highest since 1974.

In early trading this morning traders have been reluctant to buy the USD ahead of today’s U.S December Trade Data. Economists expect the deficit to widen to -$65 billion from Novembers -$64.2 billion which was the third highest monthly level ever.

With the current focus clearly on U.S Interest Rates the number may actually pass almost unnoticed unless it proves to be wide of expectations.