The U.S. presidential election has finally started to focus on some of the important things and, of course, an important thing is economics.

Trump declared that he expects U.S. growth to trend at 3.5 percent a year under his presidency.

Trend growth is simple calculate. It is a function of productivity growth and population growth, specifically working population growth. Productivity growth is simply everything that economists cannot explain, bundled together into one neat package. As such, productivity is notoriously difficult to measure and difficult to target.

Working population growth, in practical terms, can be raised "in the short term" either by increasing participation rates or by increasing U.S. population.

The Fed’s actual assumption is that U.S. trend growth is currently around, or a little below 2 percent.

To raise that trend growth rate to 3.5 percent, therefore would require an increase in productivity, or an increase in the labor participation rates, or an increase in U.S. population.

Meanwhile in Europe, 27 EU leaders meet for an extremely important summit in Bratislava, the capital of Slovakia, where the future of the European Union will be discussed, but where there will be one notable exception: British Prime Minister May who has not been invited and instead will remain sitting in the North West corner of the EU “playground” pretending not to be heard, with all the other 27 EU leaders will have to play in the sandbox in Bratislava.

This is of course the summit that alarmed France’s President Hollande and Chancellor Merkel of Germany.

Despite the preparations, the 27 EU leaders remain divided over how to deal with the European Union after the UK’s exit.

It seems unlikely that this summit will deliver concrete market relevant conclusions.

Nevertheless there is always an outside chance of something happening however. Yes, EU summits do occasionally yield results. The Fontainebleau summit in 1984 yielded results for the UK when Prime Minister Margaret Thatcher successfully negotiated the UK Rebate, which was put in place to reduce the size of the UK’s payments to the EEC funding mechanism, the so-called ‘own resources system’ and that, by the way, has been in place ever since.

Over in the U.S., of the consumer price inflation data, it will be health care costs and housing costs that will be worth looking into the details. It should be noted that neither of them is likely to be influenced by global forces.

Please take care, together, these two factors account for roughly half the U.S. consumer price basket of goods. With the oil price base effect starting to disappear from the calculations from the September consumer price inflation data onward, it will be the more parochial interests that markets and the Federal Reserve will have to examine.

Across the pond, don't underestimate the Bank of England’s (BoE) decision to leave its bank rate unchanged as the BoE's rate-setters voted unanimously to keep it at 0.25 percent, the lowest level in the BoE's 322-year history, Investors shouldn't overlook the fact that a majority of the BoE’s rate-setters members also expected this week to support a further cut in bank rate despite that indicators of economic activity have been stronger than expected.

It’s a fact that the impact of the rate cut to 0.25 percent has not been seen in the economy yet as the UK banking system has been extremely slow in passing on the rate cut to borrowers, so it will only be by the end of this month that variable mortgage payers will see a reduction of their costs, if then, which means that the economic consequences are not likely to be visible before October, at the earliest.

Finally, somewhat disappointing retail sales data caused the Fed futures implied probability of a December rate hike to drop to 49.7 percent. 

Etienne "Hans" Parisis is a bank economist who has advised global billionaires and governments on the financial markets and international investments. To read more of his articles, GO HERE NOW.