Here Are the Top Economic Events to Watch This Week in Europe and the UK
Europe and the UK face a pivotal week packed with central bank signals, growth updates, and political tests that could shape market direction heading into March.
- Lagarde’s comments could define expectations for Eurozone rates through 2026.
- Germany’s Q4 rebound offers hope, but consumer confidence remains fragile.
- The UK by-election poses political risks for Starmer’s leadership.
- U.S. labor data continues to reflect stability rather than weakness.
- Friday’s inflation readings may set the tone for the ECB’s next major move.
From Frankfurt to London and Washington, investors will be watching inflation trends, consumer sentiment, and labor data for clues about whether 2026 begins with stability or renewed volatility.
Monday – ECB Signals and EU Strategy Talks
All eyes turn to Christine Lagarde as she addresses the outlook for inflation and monetary policy at the European Central Bank. With Eurozone inflation recently easing to 2.2%, markets are eager to hear whether the ECB believes it is firmly on track toward its 2% target.
Traders will listen closely for hints on whether the deposit facility rate, currently at 2.0%, will remain unchanged through 2026. Any reaction to potential new U.S. tariff measures could add another layer of complexity, especially if Lagarde signals concern over external trade shocks. Speculation around her possible early departure before 2027 is also quietly circulating in policy circles.
At the same time, the European Parliament hosts European Parliamentary Week on February 23-24. Lawmakers will debate long-term competitiveness, investment priorities, and the next Multiannual Financial Framework for 2028-2034. Reviving EU productivity after the Draghi report remains central to the discussions.
Wednesday – Growth Momentum and Consumer Mood
Germany’s final GDP reading for Q4 2025 is expected to confirm a 0.3% quarterly expansion, marking the strongest performance in three quarters. Although full-year 2025 growth was just 0.2%, the late-year rebound, supported by private consumption and public spending, raises hopes of a stronger 1.2%-1.4% growth cycle in 2026.
Consumer sentiment, however, tells a more cautious story. In France, confidence remains stuck at 90 – below the long-term average of 100. In Germany, the GfK March forecast is projected to slip further into negative territory, from -22.6 to -24.7, reflecting ongoing political uncertainty following recent elections.
The divergence between improving hard data and soft confidence indicators will be closely watched by policymakers.
Thursday – Political Risk and U.S. Labor Stability
In the UK, a by-election in Gorton and Denton on February 26 becomes an early political test of 2026. Triggered by Andrew Gwynne’s resignation, the race pits Labour against the Green Party and Reform UK. A loss for Keir Starmer would be seen as a significant setback and could reopen internal party tensions.
Across the Atlantic, U.S. jobless claims for the week ending February 21 are expected to rise modestly to 211,000 from 206,000. Even with the uptick, claims remain historically low, suggesting a stable labor market with restrained hiring rather than widespread layoffs.
Friday – The Inflation Pulse
Preliminary February CPI readings from France, Germany, and Spain will close out the week. German EU-harmonized inflation is expected to hover near 2.1%, edging closer to the ECB’s target.
These numbers serve as crucial leading indicators for the broader Eurozone inflation path. Any upside surprise could complicate the ECB’s March 25 rate decision, while softer readings would reinforce the case for policy stability.
With inflation nearing target but growth still uneven, policymakers face a delicate balancing act. Markets now look for clarity on whether 2026 begins with renewed expansion – or renewed uncertainty.
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