The week ahead in markets and economics

With economic data and corporate earnings releases relatively thin on the ground, there are just a handful of key events that could still have important implications for markets. In UK politics, attention will be on the Holborn and St Pancras by-election, which will be closely watched for what it reveals about voter sentiment towards the government and opposition parties ahead of the next general election. Meanwhile, the annual Nobel Prize announcements take place throughout the week, culminating on Friday with the closely watched Nobel Peace Prize, an award that often highlights some of the world's most pressing geopolitical challenges.

Geopolitics will remain firmly in the spotlight, with developments involving Iran continuing to pose a potential risk to financial markets. Any escalation in tensions or disruption to shipping and energy supplies in the Middle East could have significant ramifications for oil prices, inflation expectations and interest rate forecasts. With crude prices already sensitive to events in the region, investors will be monitoring developments closely for signs of further volatility.

While the economic calendar is relatively quiet, several releases will provide fresh insights into the health of major economies, including services sector activity surveys from the US, UK, eurozone and Japan, alongside minutes from the latest meetings of both the Federal Reserve and European Central Bank. On the corporate front, trading updates from Tesco and Shell are among the highlights. 

United Kingdom

Lloyds House Price Index (September) – Wednesday 7 October

Markets expect the latest Lloyds House Price Index to show a modest 0.2% monthly rise in UK house prices, reversing the 0.2% decline recorded in August and suggesting the housing market may be stabilising after a soft patch. Economists will be watching closely to see whether lower mortgage rates, steady wage growth and resilient employment are beginning to support demand despite affordability pressures and economic uncertainty. However, expectations remain for a subdued housing market overall, with transaction volumes still weak and house price growth likely to remain modest. 

BRC’s Footfall Monitor (September) – Friday 9 October

Markets will be scrutinising the British Retail Consortium’s (BRC)-Sensormatic Footfall Monitor for evidence that shopper activity improved during September after a difficult summer period for retailers. Expectations are for footfall to remain relatively subdued, reflecting ongoing pressure on household finances, cautious consumer sentiment and competition from online shopping, although cooler weather and the return to normal routines after the holiday season may have provided some support. 

United States 

ISM Services PMI (September) – Monday 5 October

Markets expect the latest Institute of Supply Management Services PMI to show that the US services sector remained resilient in September, with activity continuing to expand at a healthy pace following August's stronger-than-expected reading of 55.4.

Minutes of September Fed meeting – Wednesday 7 October

Markets will scrutinise the minutes from the Federal Open Market Committee's September meeting for clues about how strongly policymakers support further interest rate increases and how concerned they remain about inflation. The meeting itself left rates at relatively restrictive levels, but investors will be looking for details on whether officials viewed inflation pressures, rising wages and resilient economic activity as requiring additional tightening, or whether signs of a cooling labour market argued for a more cautious approach. 

European Union

ECB publishes minutes from last rate-setting meeting – Thursday 8 October

Markets will focus on the European Central Bank Monetary Policy Meeting Accounts for further insight into the debate behind the ECB's most recent interest rate decision and how policymakers view the balance between persistent inflation pressures and slowing economic growth. Investors will be looking for evidence of how much support there was for maintaining a restrictive policy stance, particularly as eurozone inflation has remained above the ECB's 2% target and some policymakers have continued to express concern about underlying price pressures. 

Earnings reports

Wednesday: Levi Strauss & Co (third quarter), Shell (third-quarter trading update).

Thursday: Tesco (interims), Unite Group (trading update and third quarter fund valuations).

Friday: Delta Air Lines (third quarter).