(Corrects date in second paragraph to August, not September)
By Sarah White
MADRID, Aug 19 (Reuters) - Will they or won't they? The debate over whether the U.S. Federal Reserve is readying an interest rate hike will get its umpteenth airing over the coming week, with all eyes on Chair Janet Yellen to provide some clarity.
Amid conflicting signals from the Fed in recent days, central bankers from around the world will gather from Aug. 25 for an annual meeting in the mountains of Jackson Hole, Wyoming, with Yellen due to speak the following day.
A recent batch of strong U.S. employment readings have yielded upbeat views from some Fed policymakers suggesting rates could rise as soon as September, though mixed messages from the bank's latest meeting have clouded the outlook.
Minutes from the July 26-27 policy meeting showed rate setters were split over the necessity of tightening policy soon, with some arguing that more economic data was needed, including on the pace of hiring, before envisaging a hike.
Yellen is likely to cement expectations for a slow pace of rate increases.
"Yellen could provide her current assessment of the outlook for job growth, inflation and economic growth, and indicate whether caution is still appropriate or whether a rate hike might be on the horizon," economists at HSBC said in a note.
The Fed raised interest rates in December for the first time in almost a decade, but has since kept them on hold amid signs of faltering growth in the world economy and subdued U.S. inflation.
Uncertainty over its position now has knocked the U.S. dollar, leaving it close to eight-week lows against the euro.
New York Fed President William Dudley, a close ally of Yellen's, was among those sounding a more confident note in recent days on a possible near-term rate hike, citing broad progress in the U.S. economy.
A smattering of surveys and data in the coming week will add to that picture, with readings due on Tuesday on how new home sales progressed in July in the United States, followed by data on existing home sales and June house prices on Wednesday.
Further details on U.S. factory performance, via Markit's preliminary Purchasing Managers' Index (PMI) on Tuesday, will provide more clues as to whether the sector is any closer to overcoming headwinds including low oil prices.
After Britain's vote in late June to leave the European Union, euro zone economies are still on alert for any signs of a knock-on effect on sentiment as well as output and orders registered by manufacturing and services companies.
No clear damage has come to the fore so far, giving the European Central Bank some breathing space as it remains in 'wait-and-see' mode and avoids stoking expectations for further stimulus too far, despite signalling its willingness to act.
A composite PMI index reading for the euro zone on Tuesday is broadly expected to reflect businesses' continued resilience to the Brexit vote, even as growth in activity stays muted.
Meanwhile a closely-watched confidence index by Germany's Ifo think-tank released on Thursday should not produce any sharp changes.
"Forthcoming euro zone PMIs as well as the German Ifo business climate should keep moving sideways," Commerzbank chief economist Jorg Kramer said in a note.
A second reading of UK output data for the second quarter, after a preliminary release showed gross domestic product expanded by 0.6 percent, should give further steers on how business investment and consumer spending performed in the run-up to the Brexit vote.
In Japan, also increasingly under scrutiny over its struggle to hit its 2 percent consumer price target, inflation data for July is due on Aug. 26. Analysts at Standard Chartered said headline inflation was expected to remain negative, falling 0.4 percent year-on-year.
"July inflation is unlikely to have deteriorated further, but this would be the fifth consecutive month of no growth in headline and core inflation since March," the analysts said. (Editing by Toby Chopra)