U.K. Household Stress, ECB Inflation Fears, U.S. Growth: Eco Day

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Happy Friday, Europe. Here’s the latest news and analysis from Bloomberg Economics to take you through to the weekend:

• French economic growth accelerated sharply in the third quarter as households ratcheted up spending following the suspension of most Covid-19 curbs
  • Data for other euro-area countries including Germany, France, Italy due later Friday
• U.K. households are under increasing financial stress just as the Bank of England contemplates weaning the nation off of near-zero interest rates, according to debt-collection firm Lowell
• The ECB’s Governing Council advised President Christine Lagarde to emphasize their guidance on when to raise rates but to stop short of saying that investors’ bets on a hike are wrong
  • ECB policy makers expect inflation to exceed their 2% target next year but differ on whether it will stay there in 2023, a debate fundamental to forward guidance
• The euro area probably recovered at a robust pace in the third quarter, but growth is likely to slow in the final quarter of the year, especially in Germany, Bloomberg Economics writes
• U.S. economic growth slowed more than expected in the third quarter to the softest pace of the pandemic recovery period
  • Bloomberg Economics notes a strong gain in services spending hints at greater-than-anticipated momentum
• South Korean households last month faced the highest loan costs since 2019, following a Bank of Korea interest rate hike in August that was intended to curb excessive borrowing
• The Reserve Bank of Australia left its bond-yield target undefended on Friday, fueling expectations that policy makers will abandon the program as soon as next week
• As the world grapples with a breakdown in the global supply of goods, commodities and labor, the aftershock of the pandemic is fueling a trend in immigration that could define economies for decades to come: the growth of an imported underclass
• Inflation blob, ghost towns, Squid Game and Halloween Economics: a wrap of Bloomberg Economics’ latest analysis
• House Republicans want Treasury Secretary Janet Yellen to testify on the decision to refrain from calling for the removal of the IMF chief
• Underneath the surface, signs are increasing that the U.S. and China are starting to climb out of their diplomatic spiral

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With assistance from Bloomberg