European shares fell on Wednesday, with Mercedes Benz Group leading losses in automobiles stocks, while a blast in Poland kept sentiment subdued and pushed up defence stocks.

British inflation has jumped to a 41-year high on soaring energy and food bills in a worsening cost-of-living crisis, data showed Wednesday on the eve of a key budget.

The moment of truth is almost here for Britain's new prime minister Rishi Sunak and finance minister Jeremy Hunt.

Britain's economy shrank in the third quarter as inflation soars, official data showed Friday, likely confirming it is already in a recession, dealing a fresh blow to new Prime Minister Rishi Sunak.

European shares came off eight-week highs Wednesday as Marks & Spencer led declines among retailers, while investors closely tracked results from the U.S.

Germany's economy unexpectedly grew in the third quarter, official data showed Friday, but slowing growth in France and Spain added to fears that high inflation and an energy crisis will tip the region into recession.

Britain's economy looks set to go into recession as data showed it unexpectedly shrank in August, underscoring the challenge for Prime Minister Liz Truss to make good on her promises to speed up growth.

British shoppers are stocking up on electric blankets, candles and energy-efficient slow cookers as surging gas bills and record food price inflation force millions of people to prepare for a tough winter ahead.

British consumer spending grew last month at a rate that lagged behind inflation by a long way, according to surveys on Tuesday that underlined the risk of recession as the cost-of-living crisis rumbles on.

Tesco, Britain's biggest retailer, forecast full-year profit at the lower end of its previous guidance, blaming uncertainty over how consumer spending will evolve amid a worsening cost-of-living squeeze.

The Bank of Spain on Wednesday significantly cut its GDP growth forecast for next year due to the impact of higher energy prices in Europe and lower consumer spending.

Britain's private-sector economy last month suffered the sharpest contraction in activity since a COVID lockdown early last year, underlining the challenge facing Prime Minister Liz Truss who on Wednesday emphasised her push for economic growth.

Glen Ullin, North Dakota, was first in line for money to replace its leaky water pipes before Washington cut funding by one-third this spring.

A downturn in business activity across the euro zone deepened in September, according to a survey which showed the economy was likely entering a recession as consumers rein in spending amid a cost of living crisis.

Almost every week now, European governments are announcing emergency measures to protect households and businesses from the energy crisis stemming from Russia's war in Ukraine.

The Bank of England looks set to raise interest rates by at least half a percentage point on Thursday in a bid to tame inflation that is just off a 40-year high, against a backdrop of a tumbling currency and a free-spending government.

Seyda Bal, who works at a bank in Istanbul, is so anxious about the rising price of groceries that she's lapsed into a pandemic-era habit: hoarding packaged goods like coffee and toilet paper.

Japan should not raise interest rates to stem recent sharp falls in the yen to 24-year lows but instead deploy further fiscal stimulus to ease the pain of rising living costs caused by the weak currency, the head of the country's opposition party said.

Economists around the world, from the most liberal free-spenders to fiscal conservative deficit hawks, largely agreed the coronavirus pandemic required a go-big, go-fast policy response to avoid an outright global depression.

Britain will cap consumer energy bills for two years and funnel billions to prop up power companies, its new leader Liz Truss said on Thursday in a bid to tackle an energy crisis that has Europe and Russia squaring off in a deepening economic war.

Britain's surging inflation could slow if new Prime Minister Liz Truss helps households and businesses cope with rocketing energy costs, but it is too soon to say what that will mean for interest rates, the BoE's chief economist said.

Even though fears of another "sterling crisis" have been wide of the mark for decades, they are harder to bat away this time around as a fourth British prime minister in six years takes the helm.

The euro zone is almost certainly entering a recession, with surveys on Monday showing a deepening cost of living crisis and a gloomy outlook that is keeping consumers wary of spending.

UK household incomes are set to fall 10 percent in real terms in the next two years in the steepest such drop for a century.

The number of people traveling for the U.S. Labor Day holiday weekend is expected to rebound to pre-pandemic levels and possibly set new records in some cases, according to several travel companies.

Consumer morale in the euro zone's two biggest economies diverged starkly in August as French consumers benefited from fresh government measures while concerns over rising energy bills hit their German counterparts, surveys showed on Friday.

Britain's private sector slowed to a crawl in August as factory output fell and the larger services sector eked out only a modest expansion, adding to signs that recession may be looming, a closely watched survey showed on Tuesday.

British shoppers spent more than expected last month after being enticed by online shopping deals, official figures showed on Friday, but sales volumes look set to resume their decline as households face the highest inflation in 40 years.

British households are feeling "a sense of exasperation" about the surging cost of living which has pushed consumer sentiment to its lowest since at least 1974, according to the country's longest-running survey of household finances.

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