The Monetary Policy Committee’s decision to extend its quantitative easing (QE) programme by only £25bn yesterday presumably reflects the recent improvement in some of the economic indicators. However with the strength and durability of the recovery still highly uncertain, this may not be the end of QE.

In other economic news, September’s UK industrial production figures do little to support suspicions that the economy is recovering rather more quickly than the official GDP figures suggest.

Rates in the UK and Europe were kept on hold. The president of the European Central Bank, Jean-Claude Trichet, predicted the eurozone economy would recover gradually in 2010. “The latest information continues to signal an improvement in economic activity in the second half of this year,” he said. “The [bank] Governing Council expects the euro economy in 2010 to recover at a gradual pace, recognising that the outlook remains subject to high uncertainty.”

Today, from the U.S, the Labour Department is expected to report on Friday that the decline in employment is slowing. Analysts have forecast that payrolls fell 175,000 in October, compared with a decline of 263,000 in September, and that the unemployment rate has ticked up to 9.9%. The focus will be on the unemployment rate. That’s a bit different than usual, since traders typically focus more on job creation and destruction, the nonfarm payroll report, rather than the unemployment rate. However this time, unemployment is the attention-grabber, because consensus calls for it to go to 9.9% for October, up from 9.8% in September.

The UK market and the European markets have opened flat. U.S futures markets are pointing to a flat to slightly negative start when their markets open this afternoon.

Sources: Reuters: BBC: Bloomberg: Lawshare: Deutsche Bank (db): Proquote: Financial Times: Wall Street Journal: CLSA: Sharescope: Market News. Capital Economics: CNBC: Wikipedia: GaveKal:

Please note this report provides a guide to some of the relevant areas that individual investors should consider discussing with an authorised adviser in relation to their specific circumstances, it does not constitute individual advice. As a result no action should be taken or refrained from being taken as a result of its content.