Following weaker-than-forecast outturns for yesterday’s October PMI updates today’s UK and Eurozone data are likely to provide further confirmation that economic activity was under pressure in both heading into Q4. That will add to the uncertainty about how much further interest rates can rise even given ongoing evidence of high inflation and may reinforce concerns that central banks will tighten monetary policy by too much.

In the UK, the PMI data suggested that both manufacturing and services activity declined in October. Today’s CBI industrial survey will provide another insight into the factory sector and it is expected to show orders under pressure as both domestic and overseas demand weakens. There are also likely to be further signs that cost pressures are easing although the readings on these are still likely to be elevated by historic standards. Today’s update will also include the quarterly figures on businesses’ investment intentions that will be closely watched to see the extent that these are holding up given current uncertainties.

The Eurozone PMIs also showed both manufacturing and services output faltering and it seems that activity in Germany is coming under particular pressure as energy and other price pressures bite. Today’s October German IFO survey is forecast to provide a similar message with the reading for both current conditions and expectations forecast to be down again.

In the US, the Conference Board’s consumer confidence reading is expected to have fallen slightly from September’s five month high. The pickup over the past few months seems to have been fuelled by the drop in US petrol prices but US consumers need to weigh that against the still high levels of inflation as a whole and the likelihood of further interest rate hikes from the Federal Reserve.