Macro · Weekly Economic Monitor Viewpoint

Key arguments

• The ECB could raise interest rates in December unless the Gulf crisis is resolved swiftly.
• Euro area resilience persists, but consumption and confidence remain fragile, and energy costs are expected to lift inflation.
• The UK and Japan are slowing, yet a rate rise in both is likely by the end of the year.
• Iran's weakening control over the Strait of Hormuz is helping to partially rebalance the energy market, with over 13 Mb/g reportedly passing through the US naval blockade in September.

Corresponding source evidence

1. The Euro area is showing resilience, but consumption and confidence remain fragile, and inflation is expected to rise due to energy costs.
2. This mechanism is reported to have boosted non-Iranian exports from the Gulf to 10 Mb/g as early as August; in September, monitoring sites reported over 13 Mb/g passing through the US naval blockade, of which over 10 Mb/g likely transited through the Strait.
3. The rise came from the services sector (53.0 from 51.6), led by Germany (52.9 European PMI surveys paint a surprisingly positive picture of the outlook for manufacturing output, despite rising energy costs Note: Eurozone—current and expected production—diffusion indices, manufacturing sector.