ECB holds rates steady as economic data floods markets this week

This week brings the kind of economic calendar that makes traders and policymakers lean forward in their chairs. The European Central Bank will announce its final interest rate decision of 2025 on Thursday, and the expectation is that it will do nothing—hold rates steady for the fourth meeting running, ever since it cut by a quarter point back in June. But the markets are already looking ahead, pricing in the possibility of rate increases by October 2026, a signal that the monetary easing cycle may be drawing to a close.

Before the ECB speaks, the data will speak first. Eurostat will release the final inflation figures for the eurozone in November, and the preliminary numbers already suggested something worth watching: inflation ticked up to 2.2 percent, a small but meaningful acceleration after three straight months of decline. If confirmed, it breaks a streak and raises questions about whether price pressures are stabilizing at a higher level than central bankers might prefer. The United Kingdom will report its own inflation numbers for the same month, and the Bank of England, meeting on the same day as the ECB, is expected to cut its benchmark rate by a quarter point to 3.75 percent—a divergence in policy that underscores how differently the two economies are moving.

Across the Atlantic, the picture is muddied by bureaucratic disruption. The federal government's partial shutdown, which lasted 43 days and only ended on November 13, has scrambled the usual flow of American economic data. The employment figures for October and November will be released this week, but they come with caveats: the October unemployment rate won't be reported at all, and the November data was collected later than normal because of the shutdown's timing. The U.S. Department of Energy will report crude oil inventories and stocks of refined products for the week ending December 6. And near week's end, the consumer price index will arrive—the first full report in nearly two months—with economists expecting the headline number to accelerate from 0.2 percent in October to 0.3 percent in November, while the core measure, which strips out food and energy, is forecast to hold steady at 0.3 percent for both months.

Portugal's statistical agency, the INE, will contribute its own stream of data: final figures on industrial production for 2024, implicit interest rates on home loans for November, and a broad sweep of other indicators—regional statistics, environmental data, material flows. The Bank of Portugal will add October's balance of payments figures and November's state debt numbers. The eurozone as a whole will release October industrial production data and the ZEW sentiment index for December, a barometer of economic confidence among investors and analysts.

One corporate action cuts across the week: REN, the Portuguese energy company, will distribute an interim dividend of 0.064 euros per share starting December 23, meaning its shares go ex-dividend on Friday. The amount matches last year's December payout, though the nature of the payment has shifted—this year it's a distribution of accumulated reserves rather than an advance on earnings, a technical distinction that matters to accountants if not to shareholders watching their account balances.

The week amounts to a test of where the major economies actually stand as 2025 closes. The ECB's steadiness, the Bank of England's cuts, the mixed signals from American employment and inflation—these pieces together sketch a portrait of divergence. Europe appears to be stabilizing after a period of easing, while Britain continues to loosen policy, and the United States waits to see whether price pressures are truly cooling or merely pausing. By Friday, the picture will be clearer, and markets will begin pricing in what comes next.