The Bank of Japan is widely expected to leave its policy rate unchanged at 1.00% on Friday, with markets instead focused on how policymakers frame the case for another rate hike later this year.

Experts expect the BoJ to pause following June’s rate increase to assess its impact on financial conditions. However, the updated Outlook Report is expected to show stronger near-term growth prospects, reflecting the resilience of the Japanese economy, while inflation forecasts are likely to see only modest revisions. Investors will be looking for any upgrade to the bank’s assessment of underlying inflation, as well as Governor Kazuo Ueda’s tone regarding persistent price pressures, as well subsequent implications of a weaker yen.

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The Bank of England left interest rates unchanged on Thursday, as widely expected, but policymakers struck a more hawkish tone, fuelling speculation that the next move could yet be higher.

The Monetary Policy Committee voted 6-3 to leave the Bank Rate at 3.75%, in line with expectations.

However, there was a notable shift in the voting pattern, with Catherine Mann joining Megan Greene and Huw Pill in backing a 25 basis-point increase to 4.00%.

In its accompanying statement, the BoE noted that crude oil and refined energy prices had remained elevated and volatile following recent events in the Gulf, adding that the economic impact of the latest energy shock remained uncertain.

Policymakers warned that "the risk of material second-round effects in price and wage-setting, against which policy needs to lean, was greater the longer higher energy prices persist."

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The euro area economy appears to be weathering the energy shock better than expected, according to the first estimate of second-quarter GDP from Eurostat.

Preliminary figures showed the economy expanded 0.4% q/q in the three months to June, double the consensus forecast and rebounding from an upwardly revised flat reading in Q1 (previously reported as a 0.2% contraction).

On an annual basis, GDP grew 1.0% y/y, three-tenths above expectations and well ahead of the previous 0.3% pace.

HSBC economist Anja Sabine Heimann said the second quarter was always likely to be eventful, with an Irish rebound, the conflict in the Middle East and a looming tariff deadline all influencing the outlook. "Yet the eurozone outperformed expectations, recording its strongest quarterly expansion in more than a year," she said.

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As the Iran war escalates again, Gulf Arab states are looking to China - not Washington - to use its economic leverage over Iran to open up the Strait of Hormuz and Red Sea, testing how far Beijing is able and willing to pressurise ​Tehran.

The Gulf push for a bigger Chinese role is driven by growing frustration, Gulf sources say. The war launched with U.S.-Israeli attacks on Iran on February 28 has hurt their regional foe but also restricted their vital energy ‌exports and, to varying degrees, put them in the firing line.

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European football's 55 member associations have voted to boycott World Cups if the sport's governing body proceeds with a plan to sell stakes in its competitions to private investors.

The decision was made at an emergency meeting called to discuss the proposal announced earlier this week by Fifa, which oversees world football.

Uefa, which governs European football, had already made its opposition clear by releasing two damning statements - and that strength of feeling has been reaffirmed.

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