But the bigger story was ECB president Christine Lagarde's decision to step down on February 7, ahead of the French elections.

“By stepping down before the French presidential election, her departure means its winner will have no role in choosing the next ECB president – particularly significant given the political and fiscal uncertainty surrounding France,” Felix Feather, economist at , said. “Sticky energy inflation and a possible rebound in food prices, with euro-area inflation expected next week to exceed 4 per cent year-on-year in October and core inflation (excluding food and energy prices) remaining broadly stable, but also above target at around 2.5 per cent. Conversely, tighter financing conditions, as depicted in both European bond markets and the last ECB bank lending survey, warrant a more dovish approach.”

Daniele Antonucci, chief investment officer at (parent company of Brown Shipley) believes the Fed’s decision to stay on hold was no surprise. “We think one more rate increase is likely in December, but this looks like a limited adjustment rather than the start of another major tightening cycle,” he said

Noting that the Federal Open Market Committee (FOMC) held the Fed funds target range unchanged at 3.75 per cent to 4.00 per cent, in line with expectations, Jon Butcher, senior US economist, at Aberdeen, said: “Overall, the decision to hold seems to be a short pause to assess ahead of a likely policy hike in December, rather than an indication that no further tightening is needed.

“Warsh also announced a change in the FOMC calendar, shifting from eight to six policy decisions a year from 2028, and dedicating the other two to big picture, strategic, and framework discussions. We continue to expect further Fed hikes in December and March. The Fed has more work to do to demonstrate its commitment to return inflation to the 2 per cent target. But we still do not see sufficient evidence in the inflation data that a prolonged hiking cycle is needed,” Butcher said.