The European economic landscape looks mixed this week. But data points at a stagflationary period with Germany on recession mode and energy price rising fast.

Eurostat's latest data reveals a critical inflection point: inflation has climbed to 2.0%, aligning precisely with the European Central Bank's (ECB) medium-term target. Core inflation remains elevated at 2.7%. Today ECB members already pointed at a 25 bps cut in December which will put more sream on the inflation engine.

Meanwhile, the Eurozone's current account surplus marginally expanded to €37 billion, reflecting persistent export strength despite global headwinds. Trade volumes demonstrate remarkable consistency, with exports and imports maintaining near-identical levels.

German economic indicators ('Bundesbank) suggest potential recession in Q4, with business investments and external demand showing tepid performance. However, private consumption offers a glimmer of optimism.

Meanwhile the Bank of England hints at potential interest rate reductions, with council member Alan Taylor suggesting a cumulative 100-basis-point cut in 2025—a strategic move signaling cautious monetary policy adaptation.