Euro-zone inflation is poised to remain just above the European Central Bank’s 2% target, a development expected to give policymakers enough confidence to keep interest rates steady at their December 18 meeting. According to a Bloomberg survey of 29 economists, consumer prices likely rose 2.1% in November from a year earlier, while core inflation — excluding energy and other volatile components — is projected to remain at 2.4%.
As the ECB prepares its next decision, these figures are the final inflation data policymakers will see before reviewing their quarterly economic projections, which will extend for the first time through 2028. The combination of stable inflation and uncertain economic signals across member states has placed the Governing Council in a holding pattern.
Mixed Inflation Signals Across the Euro Area
Recent national data painted a conflicted picture:
- Germany and Spain recorded stronger-than-expected inflation,
- while France and Italy posted weaker numbers.
This divergence has contributed to the ECB’s hesitation to define a firm path forward for interest rates. If a policy bias exists, officials appear more focused on guarding against renewed price pressures. ECB Vice President Luis de Guindos suggested the risks of inflation undershooting the target remain limited, while President Christine Lagarde continues to note that current policy is “appropriate.”
Economists also remain divided. Bloomberg Economics anticipates inflation will cool further in the coming months, increasing pressure for the ECB to consider rate cuts in 2025. Conversely, analysts at BNP Paribas expect stronger inflation and growth from 2026 onward — a scenario that could justify a prolonged rate hold or even a future hike.
Global Economic Outlook: What to Watch This Week
The week ahead brings a wave of major economic updates across the US, Canada, Asia, Europe, and Latin America:
United States & Canada
Federal Reserve officials will receive the long-delayed September income and spending report, which includes the personal consumption expenditures (PCE) price index, their preferred inflation gauge. Core PCE is expected to rise 0.2% for the third straight month and hover just under 3% year-over-year, signaling persistent — though moderating — price pressures.
This data arrives just before the Fed’s final policy meeting of the year on Dec. 9–10, where the debate will center on labor-market cooling and whether a third consecutive rate cut is justified. Investors currently lean toward expecting another reduction.
In Canada, November jobs data is expected to reflect ongoing weakness, with slow hiring as the US trade war continues to weigh on key industries. The Bank of Canada still anticipates subdued wage growth and a soft labor market, supporting its steady-rate stance.
Asia-Pacific
Asia enters December with a packed calendar, led by dozens of manufacturing PMI releases and inflation reports. Markets will closely track comments from Bank of Japan Governor Kazuo Ueda, who may hint at the likelihood of a December rate hike.
Key data releases include:
- Australia’s housing and Q3 profit data
- Japan’s capital expenditure and corporate profit reports
- Indonesia’s inflation and trade figures
- A wave of PMI data from regional economies including South Korea, Taiwan, Vietnam, Malaysia, and the Philippines
India will be in focus Friday as its central bank is expected to cut the repo rate, aiming to support borrowing activity.
Europe, Middle East, & Africa
In the UK, the Bank of England will publish its latest financial-stability assessment, where risks from stock-market bubbles and private-credit imbalances are expected to take center stage.
Other key European developments:
- Switzerland’s inflation reading on Thursday
- Sweden’s sharply slowing consumer-price growth
- German factory orders, plus French and Spanish industrial production on Friday
- Poland’s rate-cut decision amid weakening inflation
- Turkey’s inflation, expected to ease to around 31.6%
Saudi Arabia will unveil its 2026 national budget, while South Africa releases Q3 GDP figures expected to show a slight slowdown due to tariff-related manufacturing strain.
Latin America
Brazil may see its 16-quarter growth streak come to an end as high interest rates and US tariffs weigh on economic momentum. Some analysts warn of a mild recession in the second half of the year.
Mexico’s upcoming reports — including manufacturing, consumer confidence, and investment — are all expected to underscore a widening output gap driven by weaker demand and external pressure from US trade policies.
Chile, Peru, and Colombia will release inflation data as central banks evaluate whether further rate cuts remain appropriate.
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