Bank of England and euro-zone inflation: the week ahead in Europe
In short
- The Bank of England decides on Thursday 5 November at 12:00 UK time and is expected to raise Bank Rate by 0.25 points from 3.75%. The Fed held at 3.75–4.00% on 28 October, with two officials wanting a hike.
- Euro-zone flash inflation for October is due on Wednesday 4 November. September was 3.8% (core 2.5%); national October readings are Germany 2.8%, France 3.4%, Italy 5.4% and Spain 4.9%.
- At Friday’s close the DAX was 25,818 (−0.9%), the Euro Stoxx 50 6,131 (−1.2%) and the FTSE 100 10,730 (+0.1%). One euro costs $1.1172.
Two European events this week could move the euro and global rate expectations: the Bank of England’s expected rate rise on Thursday and the first estimate of October euro-zone inflation on Wednesday. Yesterday we covered the ECB’s decision to hold at 2.5%; this is what comes next.
What happened
Bank Rate has been 3.75% since the cut of 18 December 2025. At the 17 September meeting the Bank held, 6–3, with Greene, Mann and Pill voting for 4% (Cambridge Currencies). Newsquawk lists a 0.25-point rise on Thursday as the expectation, which would start a tightening cycle; the first thing to watch is the vote split. The decision comes at 12:00 UK time with a new Monetary Policy Report.
Eurostat publishes the flash estimate for October on Wednesday. September inflation in the euro zone was 3.8% (3.2% in August), with core at 2.5% and services at 3.2%. National October figures are mixed: Germany fell to 2.8% from 3.3%, while France rose to 3.4% from 3.1%, Italy to 5.4% from 4.2% and Spain stayed at 4.9% (Euronews). Pantheon’s forecast for the euro zone is 4%, which would be up from 3.8% in September.
European shares ended Friday mostly lower: the DAX fell 0.9% to 25,818, the Euro Stoxx 50 fell 1.2% to 6,131, while the FTSE 100 edged up 0.1% to 10,730. In the morning reading a euro cost $1.1172. On the US side, the Fed held at 3.75–4.00% on 28 October by a 10–2 vote, with two members wanting a hike (FinanceFeeds), so a Bank of England rise would put it in step with US policy rather than ahead of it.
What it means for you
The math: with the euro at $1.1172, €10,000 of European shares or euro-priced assets is worth about $11,172, and each 1% move in EUR/USD changes that by roughly $112. A surprise in euro-zone inflation or at the Bank of England can move the currency as well as the share prices.
Rate decisions abroad reach US investors mainly through exchange rates, European share prices and the global rate backdrop; they do not change US borrowing costs directly.
Live prices: US and European share prices and gold prices in the US.
Bottom line
The Bank of England is expected to lift Bank Rate from 3.75% on Thursday after a 6–3 vote to hold in September, and the euro-zone flash estimate on Wednesday follows a 3.8% reading for September. European shares ended Friday mostly lower, with the euro at $1.1172.
Sources: Newsquawk · Euronews · Cambridge Currencies · FinanceFeeds
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