Economic data indicate no imminent rush of rate cuts

With the Federal Reserve now apparently on pause, which central bank is the most likely to cut rates next? One candidate is the Bank of England.

Reuters reports the latest purchasing managers' indices from the UK.

Growth in Britain's manufacturing sector slowed in April, as expected, but there was no let-up in inflationary pressures as firms ratcheted up prices at the fastest rate on record...

The Chartered Institute of Purchasing and Supply/NTC purchasing managers' index slipped to 51.0 in April from 51.3 in March. Although marginally above the consensus forecast of 50.8, it was the weakest reading since January and the second weakest in the past two years.

The UK service sector decelerated even more sharply.

Growth in Britain's dominant services sector all but dried up in April, sliding to a five year low as companies struggled against the sharpest rate of cost inflation on record, a survey showed on Tuesday...

The Chartered Institute for Purchasing and Supply/NTC purchasing managers' index fell to 50.4 from 52.1 in March, the lowest reading since March 2003 and below analysts' forecasts of 51.6.

Elsewhere, rate cuts don't appear imminent.

The eurozone economy appears to be holding up better on the whole. Reuters reports that manufacturing did weaken in April.

Euro zone manufacturing activity fell to its slowest pace in nearly three years in April as Italy and Spain slipped further into contraction, a survey showed on Friday.

The RBS/NTC Purchasing Managers Index for the manufacturing sector fell to 50.7 in April, just below the 50.8 flash reading and economists' forecasts.

But services improved.

Euro zone services sector growth picked up in April and input price inflation hit an almost eight-year high, quashing any expectations of an imminent interest rate cut, a survey published on Tuesday showed.

The RBS/NTC Eurozone Purchasing Managers index for the dominant services sector rose to 52.0 in April, just up from the flash estimate of 51.8 and the identical 51.8 forecast by 39 economists polled by Reuters...

The euro zone composite index, which combines the services survey with manufacturing sector data published last week, was 51.9 in April, in line with the flash estimate and forecast.

This was up from March's 51.8...

In fact, common to all the euro area and UK surveys is the fact that price indices mostly rose, reflecting continued inflationary pressures.

Meanwhile, China's manufacturing PMIs didn't even show a hint of a slowdown in April. From Bloomberg last week:

The CLSA China Purchasing Managers' Index rose to 55.4 in April from 54.4 in March, the highest level since the survey began in April 2004, CLSA said today in an e-mailed statement...

The purchasing managers' index released by the government yesterday rose to 59.2 in April, the highest level since the survey began in January 2005, from 58.4 in March.

So while the US economy may already be flirting with recession, economic weakness is less of a concern for much of the rest of the world. That leaves many central banks still biased towards raising interest rates, as they did in Indonesia and Romania yesterday.