Europe

Europe faces a busy week, with the European Central Bank’s interest-rate decision on Thursday and the UK’s Autumn Budget on Wednesday, alongside key GDP, inflation, unemployment and business sentiment data. Economists expect the ECB to keep rates unchanged next week before delivering another hike in December. The bank raised borrowing costs twice since the Iran war began, in June and September, as inflation accelerated to 3.8% last month, while economic output proved more resilient than anticipated. In the UK, Chancellor Healey is expected to balance support for households and businesses facing higher energy costs with a commitment to fiscal discipline. The budget is likely to include a short-term support package funded partly by higher taxes on banks, alongside measures to reduce regulatory burdens and extend import tariff suspensions. Meanwhile, Euro Area GDP is forecast to grow 1.1% year-on-year, slightly below the 1.2% recorded in Q2, while quarterly growth is forecast to slow to 0.2% from 0.6%. Spain is expected to lead the major economies, expanding 0.6% quarter-on-quarter, while Germany and Italy are both forecast to grow by 0.1%. Preliminary GDP figures from France, the Netherlands and other European economies will offer further insight into regional performance. On inflation, Germany’s consumer prices are expected to increase 0.1% month-on-month, while France’s are projected to rise 0.2%, potentially pushing its annual inflation rate higher. Preliminary figures are also due for Spain and Italy. Germany’s Ifo Business Climate Index is expected to ease slightly from its highest level in more than three years, while the GfK consumer confidence indicator is likely to remain weak. Labour market data from the Euro Area, Germany, France, Italy and Spain will also be monitored. Elsewhere, UK mortgage lending, Nationwide house prices and CBI distributive trades data will provide insight into housing and retail activity, while Switzerland’s KOF leading indicators and retail sales, alongside Turkey’s unemployment figures, round out the week’s releases. On the corporate front, HSBC Holdings, Novartis, Banco Santander, Linde and TotalEnergies SE are among the companies scheduled to report quarterly results next week. Sunday's parliamentary election in Serbia will also be on investors' radar. 

ECB President Christine Lagarde