Charting the global economy: Euro area business activity cools

Business activity in the euro area expanded at a slower pace this month, restrained by a contraction in France, where protests have devolved into rioting and looting.

In the UK, war-driven energy costs pushed inflation to an almost one-year high, while in Japan, a key measure of consumer prices exceeded the central bank’s target.

Meanwhile, US consumer sentiment slipped to a five-month low against a backdrop of high prices and borrowing costs.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

Europe

The euro area’s private sector slowed more than expected in October, weighed down by France as the region’s No. 2 economy grapples with fiscal and political tensions. While France performed significantly worse than expected, Germany recorded a fourth straight month above 50, underpinned by a stronger-than-anticipated performance by manufacturers.

UK inflation hit an 11-month high after a surge in petrol and diesel costs, a surprisingly large increase that leaves the Bank of England on track for its first interest-rate hike in more than three years. Services inflation, a sign of domestic pressures, climbed to 3.7%, while goods prices rose at the fastest pace since 2023.

UK joblessness fell and employers added jobs, according to official figures that give an unexpected boost to Chancellor of the Exchequer John Healey ahead of his crucial budget next week. The number of payrolled employees rose 13,000 last month, tax data showed.

Asia

China scaled back its fiscal austerity policies only slightly last month, before policymakers delivered a modest package of additional stimulus to ensure the economy hits Beijing’s annual growth target. Tight fiscal conditions have been a major drag on China’s economy this year, failing to give domestic demand a boost. The cutbacks could ease up in the coming few months as major national projects get underway.

Japan’s key price gauge rose above the Bank of Japan’s target level for the first time this year, supporting the case for a widely expected BOJ interest rate hike in December.

US

US business activity grew at a slightly slower pace in October but remained close to a multi-year high as robust demand pushed new orders, employment and prices higher. The S&P Global flash composite index eased 0.8 point to 57.6 in October. While growth at service providers cooled, the manufacturing index inched up to the strongest since May 2022.

Consumer sentiment edged down to a five-month low in October as high prices and rising interest rates depressed morale. A gauge of buying conditions for durable goods fell to a record low in October, with the report citing higher interest rates and rising affordability concerns.

Pending sales of existing US homes fell to a record low in September as high mortgage rates continued to weigh on demand. The bleak reading is the latest in a series of reports showing the US housing market remains mired in gridlock amid high borrowing costs and home prices.

Emerging Markets

Argentina’s economy recovered mildly in August after a much sharper drop in July as growth continues to sputter in the second half of the year. Economic activity rose 0.1% in August on a monthly basis, well off the 1.5% median estimate. From a year ago, South America’s second-largest economy contracted 1.7%.

Chile’s aging copper mines have been battered by deadly accidents, extreme weather and operational missteps, raising questions over how quickly the world’s biggest producer can recover from its lowest output in more than two decades. While tariff-related trade flows have been the main driver of record copper prices this year, mining problems are another critical factor, particularly in Chile, which accounts for more than 20% of global mined supply.

World

Brent oil was trading at the highest level since May as attacks on Saudi Arabia intensified and the war with Iran remained unresolved. The global benchmark traded around $115 a barrel early Friday. Brent is up more than 85% this year because of the US-Iran war, which is now approaching its ninth month. Refined-product prices have risen even faster, most notably diesel.

Central banks in Indonesia, Israel, South Korea, Georgia, Hungary, Paraguay and Russia held interest rates steady. Kazakhstan and Turkey lowered borrowing costs, while the Philippine central bank boosted rates.