Have central banks lost their nerve?

It looks like it. Perhaps the highest-profile pullback last week came from the Bank of England, which employed its quarterly Inflation Report to cut its economic growth forecast to the lowest point in 10 years. It also rubbed out its objective to raise interest rates several times in the coming months.

Blame the usual culprit: Brexit. It remains painstakingly complex to formulate a rational bullish case for sterling until the construct of the caustic disconnect from the EU takes shape. Budging far from $1.29 to the pound is proving to be an arduous struggle. But it is not merely the BoE that has caught a dose of the collywobbles.

The US Federal Reserve has similarly folded in the face of market volatility. Also, the week prior, the Reserve Bank of India surprised markets by cutting its benchmark rate by a quarter of a point. With all those nerves jangling, it is simple to see why markets are unsure.