- BoE reconsiders quantitative easing
- ECB forced to carry EU leadership

Good morning. Welsh nationalists are up in arms about a roadside sign saying "WC", pointing the way to a public lavatory. They insist the Welsh word "toiled" should be included. At the same time there is a total lack of concern about the expenditure of £650k on bridge being built nearby "to help bats cross the road". At the Conservative party conference a storm has erupted over whether a judge did or did not allow an illegal immigrant to stay in Britain because he had a pet cat. Rather less attention has been paid to the prime minister's emergency revision to his conference speech after commentators pointed out that paying off household debt was precisely the last thing likely to stimulate the economic growth Mr Cameron craves.

And that growth was even more minimal in the second quarter of 2011 than previously thought. In the finalised national accounts for Q2, gross domestic product growth was revised down from an already-anaemic 0.2% to a statistically insignificant 0.1%. In the nine months to June, the UK economy achieved zero growth. Over the same period household spending fell by -0.5%. Had the GDP data been the only figures on dealers' screens yesterday morning the pound would have come to grief. However, at the same time the services sector purchasing managers' index went up by nearly two points to 52.9. It was the second upside PMI surprise this week and this time it did not go unnoticed by investors, especially as the equivalent figures from Italy, France, Germany, Euroland and the States were all lower on the month.

In the end, though, investors found it impossible to get too worked up over the ecostats when they had bigger fish to fry. It was still the debt/default/recession quandary that held their attention. Yesterday the tendency was towards relaxation, helped by a perception that EU governments would do everything necessary to support their banking institutions. Equities rose and commodity-oriented currencies strengthened by a couple of cents.

The focus today will be on central bank policy announcements in London and Berlin. There is a faint possibility that the Bank of England will introduce a second round of asset purchases and an even more outside chance that the European Central Bank will cut its Refinancing Rate. Without doubt the balance of opinion in the Monetary Policy Committee is leaning more towards quantitative easing, but it is hard to see four of the nine members jumping into the QE boat with Adam Posen this morning.

At the ECB it is similarly far-fetched to imagine Jean-Claude Trichet signing up for a rate cut with Euroland inflation a percentage point above target at 3%. This will be M. Trichet's final press conference as president of the ECB and he will not want to tarnish his reputation as Scourge of Inflation on his last day. What investors will be looking for, though, is an update on the attitude of the ECB towards its support for euro zone government bonds and the provision of liquidity to commercial banks. EU leaders are acting like deer in the headlights; can (and should) the ECB do what they daren't?