Eurozone Inflation falls to a 2yr low

After 10 consecutive interest rate hikes, the ECB's decision to pause last week might be justified, despite increased risks due to global conflicts. This Thursday sees the Bank of England announce it's decision on rate - most economists expect the hiking cycle to stop, but the accompanying statement and 'forward guidance' will have to be particularly nuanced to keep markets happy.

The euro zone has been grappling with high inflation for the past 18 months, with the consumer price index peaking at 10.6% in October 2022.

The ECB responded with a run of 10 consecutive interest rate hikes that took its key rate to a record high of 4%, before choosing to pause despite upside risks to energy costs as a result of the unfolding Israel-Hamas war.

Core inflation — which excludes volatile food and energy prices — dropped to 4.2% year-on-year in October from 4.5% in September.

The euro zone economy contracted by 0.1% in the third quarter, according to flash estimates, below consensus estimates for GDP to be unchanged from the previous quarter.