The Bank of England left its key interest rate unchanged Thursday despite lowering its forecasts for growth and inflation, but indicated that it will cut again if there are signs that wage rises are slowing to a pace that would help cool prices. Investors are all-but-certain that the European Central Bank will also keep interest rates unchanged when it announces its decision later this morning. The monetary-policy moves come just a week after the Federal Reserve voted to keep its target for the federal-funds rate stable, following three straight quarter-point cuts. These decisions are playing out against the backdrop of a high-stakes federal probe: A key Republican senator said he doesn’t believe Fed Chair Jerome Powell committed a crime in testimony that has become central to an explosive Justice Department investigation.

The Bank of England left its key rate at 3.75%, matching the Federal Reserve’s most recent decision, having cut borrowing costs in December for the sixth time since August 2024.

But while the Fed signaled little urgency to resume cuts, the U.K.’s central bank said its key rate is likely to fall further, with investors seeing a move in either the March or April meetings as possible, but far from certain.

The U.S. and China are starting to manage a messy divorce on the most sensitive issues of trade. Both view their economic competition as a matter of national security. China’s leaders have determined that disentangling the two economies—often called “decoupling” or “derisking”—is inevitable. The shift fulfills a longstanding Chinese ambition to no longer be a junior partner to the West. Neither side wants to end all trade between the two economies. But fierce rivalry with the U.S. is now the primary driver of China’s economic strategy, and Xi Jinping is determined to come out on top.

7:30 a.m.: Challenger Job-Cut Report
8:15 a.m.: ECB interest rate announcement
8:30 a.m.: Unemployment Insurance Weekly Claims Report - Initial Claims
10 a.m.: U.S. Secretary of the Treasury Scott Bessent testifies to Senate committee on Financial Stability Oversight Council Annual Report
11 a.m.: FRB Atlanta President Raphael Bostic fireside chat with Clark Atlanta University School of Business dean

10 a.m.: University of Michigan Survey of Consumers - preliminary
3 p.m.: Consumer Credit
6 p.m.: Federal Reserve Vice Chair Philip Jefferson speaks at Brookings Institution event

Global central banks will take different paths this year, a divergence Goldman Sachs economists say will heavily affect currency markets. Among developed economies, Goldman expects Japan, Australia and New Zealand to raise interest rates in 2026. The U.S., U.K. and Norway are projected to cut rates, while the EU, Switzerland, Sweden and Canada will likely hold steady. This policy split "forms an important input to our G10 FX views," the bank says.  — Paulo Trevisani

• The U.S. has agreed to work with Japan, Mexico and the European Union on the development of critical minerals used in industries such as defense, the Trump administration said on Wednesday.
• Eurozone retail sales fell more than expected in December, as the rebound in household spending that is expected to help the economy in 2026 remains fragile.
• German manufacturing orders unexpectedly jumped in December, a sign that the recent struggles of the country’s industrial sector might be fading as Berlin’s fiscal stimulus ramps up.
• Silver prices tumbled after a brief two-day rebound, as volatility remains elevated and the market struggles to find footing following last week’s historic selloff.

WSJ Pro Central Banking brings you central banking news, analysis and insights from WSJ’s global team of reporters and editors. This newsletter was compiled by markets reporter Vicky Ge Huang in New York. Send your tips, suggestions and feedback to vicky.huang@wsj.com.