A big week for markets and central banks
1 November 2026
There has been plenty happening across the markets, with the UK Budget alongside interest rate decisions from the US, euro area and Canada.
UK Budget
The Autumn Budget was delivered last week against a backdrop of higher energy costs and increased global uncertainty. The OBR now forecasts UK GDP growth of 1.2% in 2026 and 1.0% in 2027, while the Government retains fiscal headroom under its rules.
For interest rates, attention now turns firmly to the Bank of England this Thursday, with the market and economist consensus leaning towards a 25bps increase to 4.00%.
US: Federal Reserve holds
The Fed kept rates unchanged at 3.75%–4.00%, although the 10–2 decision included two members voting for an immediate 25bps increase. Inflation remains elevated while economic activity continues at a strong pace, keeping the possibility of further tightening firmly in focus.
Federal Reserve press releases
Euro area: ECB also holds
The ECB maintained its deposit rate at 2.50%. Rising energy prices remain an upside risk to inflation and a downside risk to growth, with the ECB continuing to emphasise a data-dependent, meeting-by-meeting approach.
Market pricing remains considerably more hawkish further out, with the euro-area curve implying higher short-term rates over the coming year.
Canada: Bank of Canada hikes
Canada, however, increased its policy rate by 25bps to 2.50%. Higher and more persistent energy prices are a key concern, with Canadian inflation expected to remain above 3% through much of 2027.
Bank of Canada policy interest rate
Market signals: higher for longer
The common theme remains higher for longer. The Fed and ECB may have paused, but neither is signalling victory over inflation, while Canada has already moved rates higher. Sovereign yields have risen across advanced economies, reflecting tighter financial conditions and continued uncertainty around inflation and energy prices.
For Flagstone International and our clients, that continues to make rate diversification, currency choice and access to multiple banking partners increasingly relevant as we expand the platform.
Key dates over the next fortnight
3 November: US midterm elections
5 November: Bank of England decision & Monetary Policy Report
6 November: US Non-Farm Payrolls
10 November: US CPI inflation