Lead us not into stagflation. After weeks of optimism that the US economy would negotiate a soft landing and that European monetary authorities would not need to tighten their monetary policy much further, new economic data for September led to the feared equation: higher inflation plus lower industrial production equals stagflation.

All markets made the same calculation. In Europe, UK retail price inflation surprised on the upside, while Germany’s ZEW survey of business sentiment showed greater pessimism than expected.