Surging oil prices are set to reopen debate at the Bank of England over whether it needs to increase interest rates before year-end, as policymakers prepare to meet this week. The Monetary Policy Committee will discuss its key rate and balance sheet reduction pace amid a bond-market sell-off pressuring Prime Minister Andy Burnham ahead of the October 28 Budget. Markets price a less than one-in-three chance of a rate rise on Thursday, but rising energy prices from the Middle East war, accelerating inflation, and robust UK GDP growth are intensifying debate over how long the BoE can hold rates at 3.75 per cent. "The MPC's patience may be running thin and the case for staying on hold is weakening slowly," said Sanjay Raja, economist at Deutsche Bank.

Central banks globally face pressure from lingering Middle East war impacts on energy prices. The European Central Bank raised its key rate last week, while the US Federal Reserve is expected to follow suit, putting Fed chair Kevin Warsh on a collision course with President Donald Trump before November midterms. The Bank of Japan also weighs a rate decision Friday.

Elsewhere, Sweden's election remains too close to call, likely leading to weeks of coalition talks. Euronext CEO Stéphane Boujnah signaled openness to a merger with rival Deutsche Börse, potentially creating a European market of "planetary scale." Eurozone governments prepare for a major ECB leadership reshuffle by year-end.