Europe

Euro-area inflation slowed below the European Central Bank’s 2% target for the first time since 2021 — backing investor bets that interest rates may be lowered more quickly than previously anticipated, Bloomberg News reported. Consumer prices rose 1.8% from a year ago in September, down from 2.2% in the previous month as energy costs fell sharply, Eurostat said Tuesday. The reading matched a Bloomberg survey of analysts — as was core inflation, which eased to 2.7%.

Financial markets remain vulnerable to a sharp correction, the Bank of England warned Wednesday as a twice-yearly survey found that geopolitical developments are seen as the greatest threat to stability, the Wall Street Journal reported. The BOE’s Financial Policy Committe has repeatedly warned that valuations of many financial assets, particularly equities, are “stretched” and could fall sharply in response to economic or geopolitical shocks.

France plans around €60 billion ($66.4 billion) in spending cuts and tax hikes next year as Prime Minister Michel Barnier seeks to claw back a widening budget deficit and bolster investor confidence in the country, Bloomberg News reported. The savings are required to bring the budget shortfall to 5% of economic output from around 6.1% this year, government officials said in a briefing to journalists on Wednesday, speaking on condition of anonymity in line with internal rules.

Poland extended its period of interest-rate stability to one year after inflation picked up beyond the central bank’s tolerance range, Bloomberg News reported. The Monetary Policy Council kept its benchmark at 5.75% in line with the forecasts of all 35 economists surveyed by Bloomberg. The decision comes after regional peers in the Czech Republic and Hungary both reduced rates and the Federal Reserve eased its monetary policy for the first time in four years with a half-point rate reduction.

More than 700 Swedish companies went bankrupt in September, with real estate companies among the hardest hit, according to data from credit reference agency Creditsafe, Bloomberg News reported. The 17% increase from last year is a sharp turn for the worse, following a 3% annual decrease in August. Property owners had another rough month, as bankruptcies in the sector more than doubled. While hopes have increased about an economic recovery in Sweden as the central bank has reduced borrowing costs, an uptick in sentiment has yet to translate into rising activity.

Cinema chain operator Cineworld's restructuring plan was approved by London's High Court on Monday, despite opposition from two landlords, Reuters reported. Cineworld, whose brands include Regal, Cinema City, Picturehouse and Planet, set out a plan in July to restore to profitability, including addressing its lease portfolio and rental terms with landlords in Britain. Like other operators, Cineworld, which operates in 10 countries with 9,189 screens, was hit hard by the COVID-19 pandemic, when many movie releases were postponed or went directly to streaming platforms.

BlackRock Inc. is set to become the largest shareholder in SellerX as part of a deal to slash the former unicorn’s debt load, Bloomberg News reported. BlackRock, an existing lender to the Berlin-based firm, will take a stake in the business as part of a debt-for-equity swap and refinancing, the people said, asking not to be named discussing private information. Existing equity investors will retain a share of the business, they added.

The European Central Bank is more confident that inflation is going to settle at its target after a series of recent data releases, and will take that into account when it next sets policy, President Christine Lagarde said Monday, WSJ Pro Central Banking reported. Figures released on Friday and earlier Monday by the eurozone’s largest economies all point to a big decline in the inflation rate during September. Economists expect figures for the eurozone as a whole that will be released Tuesday to record the first drop below the ECB’s 2% target since mid-2021.

Vehicle production is a tough undertaking that requires numerous businesses to work towards a common goal, Car and Driver reported. Ineos recently proved just how tough a task that is by pausing production of the Grenadier SUV and Quartermaster pickup truck. A new report from Automotive News Europe suggests that the production pause may be due to Recaro's recent bankruptcy. The famous German sports seat supplier filed for insolvency in July, four years after being purchased by a U.S.-based private investment company.