Mark Carney
BoE Governor Mark CarneyBank of England TV

The UK inflation report and a speech by Bank of England governor Mark Carney will be the most important central bank events in the week to 15 August followed by rate decisions by the South Korean, Chilean and Indonesian central banks.

The Bank of Japan will also be in the news with its monthly economic survey and the minutes of the last policy-setting meeting.

The US Fed's William Dudley and Rosengren are two other central bank dignitaries who will hit the headlines in the week.

Analysts expect the quarterly inflation report by the BoE to indicate when the first rate hike will be.

Though the market widely expects the first hike by February 2015, a clearer indication of the hike will drive the sterling sharply higher from the near two-month low it is currently trading against the dollar.

The NIESR GDP estimate released last week showed that the think tank too expects the bank rate to move up from the record low of 0.5% in February next year.

Analysts at RBS expect the first BoE rate hike in February, but do not rule out an earlier increase in case the central bank raises its inflation projection significantly enough.

"This is our central case and would nudge the risks towards February 2015 for the first rate hike, while any rise in the CPI projection (and certainly any overshoot of the target) would suggest the first hike is coming in November 2014," an RBS report published last week said.

Carney talks to the press on 13 August after a gap of several weeks. His remarks in June and July had heavily impacted the markets, especially the pound.

Carney's remarks of late were largely on the hawkish side, pushing the pound to new highs, before a combination of increased safe haven flows and strong US fundamentals drove the greenback broadly higher, also weakening the sterling to multi-week lows.

The recent rise in geopolitical tensions, related to Russia-Ukraine and Israel-Gaza, were the factors behind the safe haven flows to the US dollar.

They still persist and therefore, a clear dovish bias in the inflation report and/or the Carney speech this week can push the British currency down to free lows easily.

The GBP/USD ended its fifth straight week lower on 8 August and closed the deals at 1.6766, its lowest since early June. The pair had hit a near six-year high of 1.719 earlier in July before the dollar rally had dragged it down.

Rate decisions

The Bank of Korea will decide its monetary policy on 14 August. The last rate move by the BoK was a 25 basis points cut in May 2013 and the central bank has since kept the main rate at 2.5%.

The Bank Indonesia will also set the rates on Thursday. The latest rate move by the BI was a 50 basis points hike to 7.5% in November last year.

The central bank of Chile had surprised markets with a 25 basis points cut in the main rate to 3.75% in the 15 July policy statement. Therefore, the markets will try to be cautious ahead of the 14 August decision too.

Data from the Latin American country since then were mixed. There was a rebound in industrial output in May to 1.2% year-on-year growth from the 4.2% decline registered in April.

At the same time, Chile's unemployment rate rose to 6.5% in June from 6.2% in the previous month. July trade data showed the trade surplus has dwindled to $380m from $625m.