Europe is set to get an early test of its ability to navigate a potential winter energy crisis, with an Arctic chill forecast to blow across the western part of the continent in coming days. Temperatures in London will be almost 5 degrees Celsius below average, falling as low as 6.5 overnight on Tuesday, according to one prediction. Germany, France and Spain are also facing temperatures lower than the seasonal norm. Governments will be hoping it’s just a blip ahead of a much-needed mild winter; a sustained cold snap raises the prospect of blackouts and crippled industry. The EU will propose more measures to deal with the crisis this week, and energy ministers assemble in Brussels on Friday in a bid to seal a political agreement on the latest package in double-quick time.

— John Ainger

What’s Happening

Italian Election | Giorgia Meloni’s alliance won a clear majority in yesterday’s Italian election, setting her up to become the country’s first female prime minister at the head of the most right-wing government since World War II. The leader of the far-right Brothers of Italy party will have to deal with a series of overlapping crises, with energy shortages triggered by Russia’s invasion of Ukraine fueling rampant inflation and undermining growth.

Inflation Disease | Croatian National Bank Governor Boris Vujcic can remember only too well how his country suffered inflation of 1,500% during the 1990s as it fought for independence from the former Yugoslavia, and is adamant that euro-zone policy makers need to act aggressively. “It’s clear that this is the right way to go,” he told us. “As we learned in Croatia over the last decades, when inflation is high, when it nears double-digit levels, it can become a disease in itself.”

French Finances | The French government will present a budget today that aims to renew Emmanuel Macron’s fiscal credibility despite extra spending to cushion energy price shocks and the challenge of emboldened opposition in parliament. Budget Minister Gabriel Attal said the country plans to raise the retirement age as part of a second attempt to reform the pension system.

Millionaire Spat | Spanish Prime Minister Pedro Sanchez is raising the stakes over a levy on the rich aimed at easing the burden of soaring inflation. His plan to skim off more money from “millionaires” sets the stage for a tax clash with opposition politicians ahead of next year’s national election.

Pound Plunge | The pound plunged almost 5% to a record low after Kwasi Kwarteng vowed to press on with more tax cuts, even as markets delivered a damning verdict on the new Chancellor of the Exchequer’s fiscal policies. The bulk of the currency’s slide in Asian trading took place in a frantic 20-minute selloff, evoking cries of a flash crash by traders.

In Case You Missed It

Gas Push | German Chancellor Olaf Scholz secured just one shipment of liquefied natural gas from the United Arab Emirates on his weekend swing through the Middle East, with a non-binding agreement for more.  There was no new deal with Qatar, though the country’s energy minister said that talks with RWE and Uniper on long-term LNG contracts are ongoing.

German Levy | Scholz’s finance minister, Christian Lindner of the pro-business Free Democrats, criticized the gas levy planned to help the country stave off a collapse of its energy sector, saying that he’s less concerned about the legal aspects of the plan that have stoked controversy in Germany, than about its economic rationale. It comes as the ruling coalition clashes over how best to handle the crisis.

Russia Resolve | The EU is united in seeking to extend economic sanctions against Russia, Croatian Prime Minister Andrej Plenkovic told Bloomberg TV. The region’s resolve follows Putin’s accelerated timetable for sham referendums in Russian-occupied Donetsk, Luhansk and Kherson and a mobilization of reservists that has sparked protests and talk of a border closure to prevent an exodus.

Budapest Bill | Hungary filed new anti-corruption legislation to address concerns from the EU, which has frozen crucial funding over graft accusations. To unlock funds, Justice Minister Judit Varga submitted a bill to establish a fully independent integrity authority and anti-corruption task force.

That’s Amore | Is it possible to uncover a singular dining experience in the vicinity of Rome that feels like a secret? That place is Solo per Due, which boasts just one table for two and bills itself as the world’s smallest restaurant.

Chart of the Day

Euro-area inflation probably hit another record last month, just short of 10%, keeping the heat on the ECB as it considers how aggressively to raise interest rates. All economists surveyed by Bloomberg predict a new high for consumer-price increases. The median forecast is 9.7%, with four predicting a double-digit outcome. Data for the 19-nation euro zone are due Friday following reports from the region’s three largest economies.

Today’s Agenda
All times CET.

• 10 a.m. Agriculture and Fisheries Council in Brussels
• 10:30 a.m. OECD to release new economic forecasts
• 2 p.m. CEPS webinar “The Future of Europe: From Conference to Convention?
• 3 p.m. European Parliament Committee on Economic and Monetary Affairs holds Monetary Dialogue with ECB President Christine Lagarde
• 5 p.m. European Parliament Structured dialog on taxation with Economy Commissioner Paolo Gentiloni
• NATO General Secretary Jens Stoltenberg meets European Commission President Ursula von der Leyen
• Vice-President Margaritis Schinas meets Matt Brittin, President of Google EMEA Business & Operations
• Commissioner Didier Reynders opens the Conference on fundamental rights and the rule of law organized by the European Economic and Social Committee (EESC)
• Vice-President Frans Timmermans delivers opening speech at Green Deal Summit in Prague
• Vice-President Vera Jourova visits Ukraine