This week sees the Bank of England's monetary policy committee (MPC) meeting to set interest rates.

Sterling started the week with the pound worth $1.90685, €1.48375 and 222.06500 yen. The MPC will announce its decision on Thursday on whether to keep rates at 4.75 per cent after last month's surprise rate rise.

It is expected that the MPC will choose to keep interest rates at the new level, waiting to see the effect of the August increase - although a second rate rise this year is expected to take rates up to five per cent, especially as recent housing data shows the UK market to be performing well. Recent good retail sales figures may also urge the committee that inflation remains a solid risk and a rate rise this year may be necessary.

Also of interest this week will be details of how well the aviation industry coped with the increased security alert.

Both British Airways and easyJet will release to the stock exchange details of passenger numbers for August.

The markets will be keeping an eye not so much on the immediate drop in trade after the alleged terror plot was uncovered, but whether the airlines faced a general drop in passenger numbers over the month and if UK consumers have been turning their back on air travel.