China Growth Hit, BOE Rate Hike Bets, EU’s New Tool: Eco Day

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Welcome to Monday, Europe. Here’s the latest news and analysis from Bloomberg Economics to help you start the week. 

• China’s economy weakened in the third quarter, weighed by multiple headwinds from a property slump to an energy crisis. Bloomberg Economics Chang Shu wrote the slump driven by supply shocks means monetary and fiscal easing might be less effective in countering the slowdown
• Meantime, People’s Bank of China Governor Yi Gang said authorities can contain risks posed to the Chinese economy and financial system from the struggles of China Evergrande Group
• Bank of England Governor Andrew Bailey moved to strengthen the case for raising interest rates, saying the central bank will “have to act” to curb inflationary forces. But economists are growing increasingly pessimistic about the outlook for the U.K. recovery, leaving them at odds with markets on the prospects for rapid BOE hikes
• European Central Bank President Christine Lagarde warned that the globalized nature of the euro area’s economy makes it highly vulnerable to systemic shocks from supply chain disruptions. She also said the current spike in inflation is unlikely to last
• The European Union as soon as this week may trigger a new tool that allows it to withhold budget payments to member states that fail to adhere to the bloc’s democratic standards
• New Zealand inflation surged at the fastest pace in 10 years in the third quarter, reinforcing bets that the central bank will keep raising interest rates
• Chief financial officers of U.K.’s largest companies expect labor shortages and supply disruptions that are hampering the country’s economic recovery to last until 2023
• India is in no hurry to withdraw stimulus provided to support the economy as policymakers want to ensure that the country is on a durable growth path, Finance Minister Nirmala Sitharaman said

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