Time to wrap up, on a day in which the UK’s supply chain problems and the energy price crisis worsened, and fears of a winter cost of living crisis mounted.

Here are today’s main stories:

And in other news..

And for those less worried about making ends meet....

Goodnight. GW

In the City, the FTSE 100 index of blue-chip shares has closed slightly lower - lagging other world markets.

The FTSE 100 dipped 5 points, or 0.07%, to 7078 points.

Shares were held back by the jump in the pound (which hits multinational exporters) as traders priced in an earlier interest rate rise.

Engineering firm Rolls-Royce (+3.9%) led the risers, with banks and mining companies also stronger.

But gambling firm Entain shed almost 5%, having hit record highs yesterday after a takeover approach from US fantasy sports and betting group DraftKings.

That approach creates a clash with Entain’s US partner (and previously thwarted bidder) MGM, as Hargreaves Lansdown’s Nicholas Hyett explained yesterday:

BetMGM, Entain’s US joint venture with casino operator MGM, is likely the beacon that attracted DraftKings. Entain estimates the US sports-betting and iGaming market will be worth approximately $20.3bn by 2025. Recent market share gains and the steady increase in the number of states in which the company operates suggest BetMGM could be in-line for a sizeable chunk of that money.

However, MGM can effectively veto the deal if it would see Entain become part of a rival US gambling operation, the kind of operation DraftKings already runs. The acquisition could also draw criticism from US regulators as an antitrust issue.

European markets had a stronger day, with Germany’s DAX up 0.85% and France’s CAC gaining almost 1%.

Michael Hewson of CMC Markets explains:

It’s been another positive day for European markets, up for the third day in a row, despite evidence that the broader economy is slowing. The FTSE100 for its part has done its best to reprise its role as the perennial party pooper, sliding back from its intraday highs, and struggling to close in positive territory. Some of that may be down to the sharp rise in the pound, and sharp rise in gilt yields.

The biggest loser has been Entain as it gives up some of the recent gains of the last couple of days. We’ve also seen some modest profit taking on utilities and consumer discretionary shares, with National Grid, Severn Trent and United Utilities all softer

Lloyds Banking Group, Barclays and NatWest Group are amongst the better performers as a consequence of the rise in gilt yields.

Despite inflation heading above 4%, the Bank of England is adopting a wait and see approach by leaving interest rates on hold today, and continuing its QE stimulus programme.

On the face of things, the Bank of England is asleep at the wheel and should be taking steps to ease growing price pressures.... but it’s not quite that simple, as our economics editor Larry Elliott explains:

One reason for that is the high degree of uncertainty about the prospects for the economy. The rise in inflation has coincided with a slowdown in the recovery that began when lockdown restrictions started to be eased in March. There are more people still on the government’s furlough scheme than the Bank predicted in its August health check on the economy, and the scheme ends next week.

A second reason is that the Bank believes higher inflation is transitory (even though a bit less transitory than it previously thought). There are precedents for the MPC not taking immediate action to tackle an inflation overshoot when the economy has been subject to a severe shock.

With the furlough scheme ending, living standards squeezed and tax rises to come in the spring, the Bank would prefer to leave policy unchanged rather than act in a way it might later regret.

Here’s Larry’s analysis:

The Bank of England has warned surging household energy bills will drive inflation above 4% this winter, with persistent pressure on living costs expected to last through to the middle of next year despite a slowdown in the economy.

Voting unanimously to keep interest rates at the historic low of 0.1%, the Bank’s monetary policy committee (MPC) warned severe shortages of workers and raw materials were weighing on Britain’s economic recovery from lockdown.

In a downbeat assessment as inflation soars despite a growth slowdown, Threadneedle Street downgraded its estimates for the level of UK GDP at the end of September by about 1%, meaning the economy would remain about 2.5% below its pre-pandemic level heading into the final three months of the year.

The nine-member MPC, which includes the governor, Andrew Bailey, said Ofgem’s hike in the household energy price cap in October, amid record wholesale gas and electricity prices, would lead to a fresh burst in inflationary pressure this winter.

Inflation as measured by the consumer prices index (CPI) jumped to 3.2% in August, the highest level in nearly a decade. The Bank said distortions caused by the rapid recovery from last year’s economic slump were driving up the barometer for living costs, with an increase expected to rise “above 4%” by the end of December.

It said Ofgem’s update of the energy price cap from April next year, which is likely to put further pressure on household energy bills, risked inflation sticking above 4% until the second quarter of 2022. Inflation is then expected to gradually fall back towards the 2% target rate set by the government.

More here:

Severe shortages of workers and supplies have dragged down economic growth in Britain to the weakest levels since pandemic restrictions were eased in March, according to a closely watched business survey.

The latest snapshot from IHS Markit and the Chartered Institute of Procurement and Supply (Cips) showed that growth in private sector output slowed in August as firms battled with severe shortages while costs rose at the fastest pace since the late 1990s.

Business activity faltered in the dominant service sector, which accounts for 80% of the economy, while the slowdown was more pronounced in manufacturing where severe supply-chain disruption held back growth in factory output.

In a sign that the economic recovery from lockdown is waning, business expectations for the year ahead fell to their lowest since January and new orders eased to a seven-month low. More here.

ITV are reporting that BP has told the government that it plans to restrict deliveries of petrol and diesel to its network of service stations to ensure continuity of supply.

It’s another sign that the UK’s shortage of lorry drivers is hitting the economy, having already caused disruption for retailers such as supermarkets.

Joel Hills, ITV’s Business and Economics Editor, explains:

The company’s ability to transport fuel from refineries to its network of forecourts is being impacted by the ongoing shortage of HGV drivers.

At a meeting, organised by the Cabinet Office last Thursday, BP’s Head of UK Retail, Hanna Hofer, said it was important that government understood the “urgency of the situation” which she described as “bad, very bad”.

According to Hofer, BP has “two thirds of normal forecourt stock levels required for smooth operations” and that level is “declining rapidly”.

The company is preparing to restrict deliveries “very soon”.

This will mean running 80% of services levels to 90% of BP’s forecourt network and that most locations, as a result, will not be restocked for one-and-a-half days a week.

Forecourts on motorways will be prioritised and will be restocked as normal.

More here.

The pound has jumped, as the City anticipates that the Bank could rise interest rates sooner than previously thought to tackle inflation.

Sterling has gained almost a cent against the US dollar to $1.3715, as investors and traders predict an earlier rise in borrowing costs - possibly as soon as March 2022.

Oliver Blackbourn, multi-asset portfolio manager at Janus Henderson Investors, said deputy governor Dave Ramsden has turned more hawkish, by voting to end QE bond-buying early:

As was widely expected, the Bank of England maintained its current policy stance. Dave Ramsden joined Michael Saunders in voting against completing the scheduled set of asset purchases, a somewhat symbolic move given previous communications and the limited time left to run anyway.

However, it does signify his increasingly hawkish stance on monetary policy, an important sign as markets focus on the potential for an interest rate increase in the first half of 2022. Markets are now pricing lift off in March and two hikes by the end of next year. The focus will now switch to the November meeting when a new set of forecasts will be made available.

City traders have brought forward their forecast for the first UK interest rate rise since the pandemic, Bloomberg reports:

Traders brought forward wagers on a Bank of England rate hike to 0.25% after officials said developments since its August meeting appear to have strengthened the case for modest tightening.

Money markets now see a 15-basis-point increase in March 2022, having priced it for May before Thursday’s meeting. They still see a further quarter-of-a-percentage-point rise to 0.5% in November 2022. Two BOE officials dissented to vote for a reduction in bond purchases.

The Bank of England says that recent price developments “appear to have strengthened” the case for a modest tightening of monetary policy over the forecast period (something it flagged back in August).

Consumer price inflation jumped to 3.2% last month, a record monthly rise from 2%, and the highest level since March 2012.

The Bank blames ‘base effects’ for the majority of that surge (a year ago, food and drink prices fell due to the Eat Out to Help Out scheme).

It also points to global cost pressures, and supply bottlenecks, driving up UK consumer goods prices.

And it still expects CPI inflation to fall back to close to the 2% target in the medium term, “conditioned on the market path for interest rates” (ie, if the Bank raises interest rates as the City expects).

But, the Bank also acknowledges that people expect higher inflation:

Indicators of households’ medium-term inflation expectations have increased in recent months, with the Citi/YouGov five-to-ten year ahead measure at its highest level since 2013 in September.

The Bank of England has also lowered its growth forecasts for the UK economy, warning that supply chain problems are hitting output (as this morning’s PMI survey showed).

Bank staff have revised down their expectations for the growth in the third quarter of this year, from 2.9% to 2.1%.

That would leave the level of Q3 GDP around 2½% below its pre-Covid level.

The Bank warns that supply constraints are hurting growth - from a lack of raw materials to staff shortages.

These have been evident in surveys showing historically lengthy supplier delivery times and backlogs of work, significant material and labour shortages in a number of sectors, and lower than normal levels of inventories.

Momentum appears to have picked up in services-orientated sectors where output remains well below pre-Covid levels. Although official estimates of retail sales have weakened somewhat, other indicators of spending have generally remained at strong levels, as has consumer confidence.

The Bank also warns the pace of the world’s economic recovery also shows signs of slowing, with global inflationary pressures still strong, and signs that cost pressures may prove more persistent.

The Bank of England has warned that inflation will rise above 4% by the end of this year, due to the energy price shock.

The Bank says the surge in gas prices are an ‘upside risk’ to its inflation projections in August (when it saw inflation hitting 4% by the end of the year).

The Monetary Policy Committee also warn that inflation could remain above 4% into the second quarter of next year -- which would intensify the cost of living squeeze facing UK households.

The minutes of this month’s monetary policy committee meeting say:

CPI inflation was expected to rise further in the near term, to slightly above 4% in 2021 Q4, owing largely to developments in energy and goods prices.

The material rise in spot and forward wholesale gas prices since the August Report represented an upside risk to the MPC’s inflation projection from April 2022, and meant that CPI inflation could remain above 4% into 2022 Q2, all else equal.

Most other indicators of cost pressures had remained elevated. The Committee’s central expectation continued to be that current elevated global cost pressures would prove transitory. Indeed, there were still good reasons to expect material supply responses in commodity and other global markets, pushing down on future input prices and import costs.

The Bank also suggests that it expects the energy price cap to rise again when it is reviewed next year:

Spot and forward wholesale gas prices had risen materially since the publication of the August Report, against a backdrop of strong demand and some supply disruption.

This could represent a significant upside risk to the MPC’s inflation projection from April 2022, when Ofgem next updated its retail energy price caps based on the relevant forward contracts, and meant that CPI inflation would remain slightly into 4% until 2022 Q2, all else equal.

Bank of England has left UK interest rates on hold at record lows, but there’s a split over its stimulus package.

The Monetary Policy Committee voted 9-0 to leave Bank rate at just 0.1% at this week’s meeting. The MPC also voted to maintain its quantitative easing bond-buying programme at £895bn.

BUT two policymakers, deputy governor Dave Ramsden and external member Michael Saunders, voted against this proposition.

They wanted to stop QE early, by reducing the amount of UK government bonds the Bank buys, from £875bn to £840bn.

Back in August, Saunders was the only policymaker who wanted to end QE early.

Growth across UK companies has fallen to a seven-month low in September, as rising costs lead companies to hike prices at a record pace.

Data firm IHS Markit reports that the UK private sector is losing momentum as it enters the autumn, increasing the risk of stagflation.

Growth in output and new orders so far this month are the weakest since February (just before lockdown restrictions were eased), according to its latest poll of purchasing managers.

And while growth slowed, inflationary pressures showed little sign of abating, due to severe supply-chain disruption, raw material prices and increased transportation costs -- with Brexit being cited as a factor by many companies.

Some firms also reported rising wages, as they lift pay to try to attract workers.

In response, companies raised their own selling prices at the strongest pace on record, which could push up prices in the shops.

Employment growth slowed sharply at manufacturers -- with some struggling to find suitable staff and others looking to reduce workforce numbers due to softer demand (a worrying development).

Services firms kept hiring at a strong pace, though.

This pulled Markit’s Flash UK Composite Output Index, which measures growth, down to 54.1, a seven-month low, from August’s 54.8.

Chris Williamson, chief business economist at IHS Markit, says the data will add to worries that the UK economy is “heading towards a bout of ‘stagflation’” - as growth slows and price surge ever higher.

While there are clear signs that demand is cooling since peaking in the second quarter, the survey also points to business activity being increasingly constrained by shortages of materials and labour, most notably in the manufacturing sector but also in some services firms. A lack of staff and components were especially widely cited as causing falls in output within the food, drink and vehicle manufacturing sectors.

“Shortages are meanwhile driving up prices at unprecedented rates as firms pass on higher supplier charges and increases in staff pay. Brexit was often cited as having exacerbated global pandemic-related supply and labour market constraints, as well as often being blamed on lost export sales.

Business expectations for the year ahead are meanwhile down to their lowest since January, with concerns over both supply and demand amid the ongoing pandemic casting a shadow over prospects for the economy as we move into the autumn.”

A UK government minister says consumers should not ‘panic buy’, following warnings that Britain faces mounting problems this winter.

Reuters explains:

Consumers should not panic buy products as Britain is not heading back into a 1970s-style “winter of discontent” of strikes and power shortages, a junior minister said on Thursday.

“There is no need for people to go out and panic buy,” small business minister Paul Scully told Times Radio.

“Look, this isn’t a 1970s thing at all,” he said when asked if Britain was heading back into a winter of discontent - a reference to the 1978-79 winter when inflation and industrial action left the economy in chaos.

Supermarkets and farmers have called on Britain to ease shortages of labour in key areas - particularly of truckers, processing and picking - which have strained the food supply chain.

Nearly a fifth of UK companies couldn’t get the materials, goods or services they needed late last month, or were forced to change suppliers to do so.

That’s according to the Office for National Statistics, which found over a third of construction firms faced supply problems in the fortnight to 5th September.

The ONS says:

Across all industries, 10% reported they were able to get the materials, goods or services they needed, but had to change suppliers or find alternative solutions to do so. This is up from 8% in early July 2021. The construction industry reported the largest percentage at 28%, an increase from 15% in early August 2021. This was followed by the accommodation and food service activities industry and the manufacturing industry at 16% and 12%, respectively.

Across all industries, 8% reported they were not able to get the materials, goods or services needed, this has remained broadly stable from early August 2021. The other service activities industry reported the largest percentage at 20%, followed by the wholesale and retail trade; repair of motor vehicles and motorcycles industry at 13%.

The latest poll of UK firms also found that more than 60% of importing businesses continue to say they have faced challenges importing goods.

Brexit is clearly a cause - with many companies citing additional paperwork, change in transportation costs, and customs duties or levies.

The ONS says:

The proportion of currently trading businesses that experienced a challenge in importing or exporting has remained broadly stable since a large increase in January 2021.

There has been an ongoing fall in the proportion of businesses saying they have not been able to import or have imported less than normal, although more than 60% of importing businesses continue to state that they have faced challenges importing.

The data suggests businesses are more likely to be experiencing an importing challenge than an exporting one.

The Bank of England will be more worried about the impact on the economy from the gas prices crisis, rather than on inflation, says Tom Pugh, UK economist at accountancy firm RSM.

Pugh warns that surging prices will hit companies, while looming tax increases and steeper energy bills will leave consumers with less money to spend.

So he thinks the Bank’s policymakers will focus on the underlying economy, for three reasons:

• First, the disruption to some energy-intensive industries, such as fertilizer and steel manufacturers, and the knock-on effect to other industries will weigh on the economic recovery. The manufacturing sector is already struggling with labour and material shortages. Output was flat in July and is still 2.4% below its pre-crisis level, so further disruptions could easily cause activity to slip again.
  
  
• Second, most households already face a 1.25% tax rise in April next year, when the new Health and Social Care Levy kicks in. This could knock between 0.5% and 1.0% off consumer spending, although its impact on GDP will be offset by a boost in government spending. The rise in energy bills could dent consumer spending further, dampening demand for goods and services in the real economy. UK households and businesses spent about £55bn on gas and electricity in 2020.
  
  Based on the moves in wholesale prices, Ofgem may increase the utility cap by 20% in April 2022. If consumers respond to this price increase as they would to a tax rise, it could reduce real GDP by about 0.3% over a year.

• Third, core inflation, which excludes food, fuel and energy prices and is the MPC’s preferred measure of underlying inflation, will still fall back quickly next year as the pandemic-related drivers of the current spike drop out of the annual comparison.

Ouch. Growth across companies in the eurozone is slowing, as supply chain problems, rising prices and Covid-19 continue to bite.

Data firm IHS Markit reports that eurozone business activity grew at a markedly reduced rate in September, as price pressures intensify.

Manufacturers blamed supply chain bottlenecks, while service sector firms said the ongoing pandemic hit demand, particularly for service sector exports.

Business expectations for the coming year were also knocked by rising worries over the impact of the Delta variant on demand and supply chains.

Jobs growth slowed, and firms’ costs jumped at the fastest rate in 21 years -- adding to inflation pressures.

This all pulled Markit’s eurozone PMI, which measures activity, down to a five-month low of 56.1 in September, from 59.0 in August (anything over 50 shows growth).

Chris Williamson, chief business economist at IHS Markit says the eurozone faces an unwelcome combination of sharply slower economic growth and steeply rising prices.

“On one hand, some cooling of growth from the two-decade highs seen earlier in the summer was to be expected. On the other hand, firms have become increasingly frustrated by supply delays, shortages and ever-higher prices for inputs.

Businesses, most notably in manufacturing but also now in the service sector, are being constrained as a result, often losing sales and customers.

Concerns over high prices, stressed supply chains and the resilience of demand in the ongoing pandemic environment has consequently eroded business confidence, with expectations for the year ahead now down to the lowest since January.

Dame Clare Moriarty, chief executive of Citizens Advice, has warned that poorer households face a ‘perfect storm’ this winter - and that households whose energy supplier have collapsed probably face higher bills.

People whose energy supplier has collapsed should stay calm, she says. They won’t lose their gas and electricity, and will be transferred by Ofgem to a new supplier. That can take a few weeks so sit tight, she told the Today Programme.

But she warns that customers whose energy firm has collapsed could be hit with higher bills when they are switched.

People will be transferred to a new supplier. They won’t be transferred, necessarily, on the tariff they were on previously.

So if people were on particular deals they will tend to transfer on to the standard tariff of the new supplier. So that may mean that people’s bills will go up.

Credit balances will transfer, as will any money owed to a supplier, Moriarty explains.

Q: So if you’re on a deal you were encouraged to find - that deal can now be torn up?

Dame Moriarty agrees that it is a “really, really worrying time for people”.

Yes, it is true that bills may go up if people are transferred to new suppliers. And we know that the energy price cap is going up next week.

It’s a very, very worrying time for people.

Citizens Advice are very conscious just how much people’s finances are being squeezed, she explains - particularly people on the lowest incomes who are facing a ‘perfect storm’.

That storm come from a combination of energy price increases, the end of the furlough scheme and the likelihood of more redundancies, and “critically” the end of the £20 per week uplift in Universal Credit.

Citizens Advice are also seeing an increase in people seeking information and advice on energy suppliers, and also seeking help coping with the cost of living squeeze.

Dame Moriarty explains:

We are seeing people come to us because, more broadly, they’re just seeing family finances being really, really squeezed.

We know that this is going to be a very difficult winter for many people on low incomes.

Fears of shortages in the shops this Christmas, from the lack of lorry drivers, are also rising today.

ITV News explains:

Tesco has told the government it is concerned about panic buying in the run-up to Christmas unless urgent action is taken to address a national shortage of HGV drivers.

In a meeting organised by the Cabinet Office last Thursday, the UK’s largest supermarket revealed it has a shortfall of 800 lorry drivers and asked the government to temporarily make it easier to bring in workers from abroad.

Tesco has been offering new recruits bonuses of £1,000 since July but Andrew Woolfenden, the supermarket’s UK distribution and fulfilment director, said Tesco has only managed to attract as many drivers as it has lost to rival businesses over the summer.

Mr Woolfenden said the problem was industry-wide and described attempts by companies to recruit from the same, limited pool of drivers as like “moving deckchairs around”.

More here: Tesco, Amazon and McDonald’s warn of Christmas disruption due to HGV driver crisis

Britain’s “Bang crash wallop” of economic trouble means the Bank of England is likely to continue to play a waiting game on interest rates.

So says Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.

‘’There has been a bang crash wallop of troubling economic signs this week, which may keep tensions high round the table at Bank of England’s monetary policy committee today. Members know full well that the economy needs to be weaned off the drug of cheap money, not least to give them options to treat any future crises and to keep a lid on inflation.

But an interest rate rise any time soon, could tip many borrowers over the edge and into more debt, and put a further break on recovery. Already consumers were faced with rising prices in the shops, but now energy hikes are on the cards as soaring gas prices lead to the collapse of smaller cheaper providers. As well as the supply chain crisis, exacerbated by a shortage of labour and bottle necks at ports, the energy crunch is now feeding the fires of inflation. There was a bigger than expected rise in the consumer price index which shot up to 3.2% in July and the bank has already warned that the only way is up for prices over the coming months. The crux of the issue is whether these rises are transitory, a mantra which the MPC have overall stubbornly stuck to.

Although it increasingly looks like inflation will linger for longer, most committee members are still likely to sit firmly on their hands and play a waiting game until well into next year, even when it comes to rolling back the mass bond buying stimulus programme.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Britain’s cost of living crunch will give the Bank of England much to ponder today as the central bank meets to set interest rates.

Yesterday two energy companies failed, affecting another 800,000 households, as ministers admitted they were considering a windfall tax on companies profiting from record gas prices.

Avro Energy, with 580,000 household customers, became the biggest energy supplier to fail and Green, which has 255,000 customers, also ceased trading - meaning more households will face higher energy bills within weeks.

Around 1.5 million households now face being transferred to new suppliers -- probably on a higher tariff, meaning they could face paying hundreds of pounds more for their gas and electricity per year.

As we report this morning:

Pressure is mounting on ministers to find ways of providing some financial support for households, which are due to be hit with a £139 increase in bills next month – some of the most expensive energy bills on record.

Combined with the £20 universal credit cut and rising inflation, Labour and some Tory MPs have warned of a potentially catastrophic cost of living crisis.

On Wednesday, the Joseph Rowntree Foundation estimated a typical low income family would be £1,750 worse off by next April.

The energy market shock has also raised concerns for the UK’s struggling consumer supply chains and heavy industries such as steel, reigniting fears of empty supermarket shelves ahead of Christmas and a return to a three-day week for factories.

Green’s chief executive, Peter McGirr, told the Guardian there would be a “tsunami of more [collapses] to come” because small suppliers do not have deep enough pockets to weather the surge in costs without passing them on to their customers.

McGirr explained:

“We’re an independent company.

“It’s hard to access finance and nothing has been done to help.”

He added that the crisis talks held last weekend by the business secretary, Kwasi Kwarteng, had failed to include the smaller suppliers that are most vulnerable to the energy market shock and said his company’s calls for help from the industry regulator had “fallen on deaf ears”.

So this all gives the Bank of England a headache, as policymakers consider whether to continue with its QE stimulus programme, and when it might need to raise interest rates to calm inflation.

Inflation soared over the Bank’s target last month, to 3.2%, and is expected to keep climbing.

While surging energy prices will push inflation up, the squeeze on household budgets means a rise in borrowing costs would be painful.

Rising prices in the shops, the imminent £20/week cut to Universal Credit, and the end of the furlough scheme next week means many families face a cost of living crisis this winter.

New estimates from the Joseph Rowntree Foundation, seen by the Guardian this week, found a typical low-income UK family will be £1,750 worse off by April 2022 as factors combine into a spiralling cost of living crisis.

So the BoE is expected to leave borrowing costs at record lows at noon today - while the minutes of the meeting will show whether its Monetary Policy Committee is concerned about the economic situation.

Deutsche Bank analysts expect ‘no change’ today, but they also expect the BoE to reaffirm that some tightening will be needed over the next few years to keep inflation in check.

Yesterday, the BoE’s counterparts in America said they could start ‘tapering’ their stimulus programme soon, and end the bond-buying programme up by next summer.

The Federal Reserve left interest rates unchanged at near zero after its latest meeting. Rates were cut in March 2020 as the US economy reeled from the impact of the pandemic. But the Fed also indicated it may soon start pulling back on the $120bn in monthly asset purchases program that it started when the coronavirus hit the US.

“If progress continues broadly as expected, the Committee judges that a moderation in the pace of asset purchases may soon be warranted,” the Fed’s post-meeting statement said

Also coming up today...

New surveys of UK, eurozone and US companies will show how the energy price squeeze, commodity shortages and record vacancies are hitting firms.

Investors are also watching the Evergrande crisis, as the Chinese property developer faces a key debt interest payment due today. Yesterday it struck a deal over another debt, on a domestic bond, which has reassured markets somewhat - with stock markets expected to rise.

The agenda

• 9am BST: Eurozone ‘flash’ purchasing managers survey for September
• 9.30am BST: UK ‘flash’ purchasing managers survey for September
• 12pm: Bank of England interest rate decision, and MPC minutes
• 1.30pm BST: US weekly jobless claims figures
• 2.45pm BST: US ‘flash’ purchasing managers survey for September