Five things will determine the future of Europe's economies this week – the Italian referendum is just the start

An Italian no to reform is 'in the market', in that this outcome is the expected one. But this year has taught us that you never know the outcome of a popular vote

Matteo Renzi has said he will quit if he loses, which would spark renewed political turmoil (EPA)

This is a weekend of two referendums: one on reforms to the Italian constitution; the other the Austrian presidency. Writing ahead of the outcomes, the main thing to look for this week will be the market reaction to the Italian vote – the Austrian election is less important in its financial implications.

An Italian no to reform is “in the market”, in that this outcome is the expected one. But just as this year has taught us that you never know the outcome of a popular vote, you cannot predict the response afterwards. And the initial response may be very different from the perceptions a couple of weeks later.

What is happening in both Italy and Austria will tell us something about the Europe of tomorrow. Will this be a Europe that will be more competitive in economic terms and calmer in social ones? That will show in the reaction of the euro vis-à-vis the dollar. The dollar has been extremely strong in recent weeks, strengthened partly by the steady growth of the US economy, and partly by the strong expectation of higher interest rates next week – the Federal Reserve meets on 13 and 14 December. The promise of a fiscal stimulus in the US has driven it higher too.

But the European economy has not had a bad autumn. Italy lags behind but the rest of the Eurozone has grown reasonably well. The forward-looking data is not bad.

That leads to the second thing to look for, the next move of the European Central Bank. The ECB’s governing body is widely expected to have what will be its final effort to encourage growth by announcing another bout of quantitative easing. This is the only thing it can do, for its short-term interest rates are zero or below. Why the final effort? Because the trend for rates worldwide, led by the US, is upwards. Inflation in Europe, nudged by the recovery in oil prices, is heading up too.

That leads to number three, will the OPEC deal stick? It will be too early to know what the producers will actually do, but not too early to see what the market makes of the historic agreement to curb production. The last such deal was eight years ago.

There is one statistic in the UK to watch for, the PMI for the services industries. If that remains reasonably strong for November we can expect a decent final quarter for the economy as a whole. Remember that services account for nearly 80 per cent of GDP. The final number for the UK growth this year could well be 2.1 per cent, showing little or no net adverse impact from Brexit.

However what happens to the economy in the UK will be overshadowed by the Supreme Court vote on Brexit – well, not on Brexit itself, but rather whether Parliament needs to have a vote before triggering Article 50. On the assumption that it will support the earlier High Court ruling that a bill does need to be passed, expect the debate to be sharpened about the nature of Britain’s rift with Europe.

Maybe this debate will be less about how hard the split should be – or at least how sharp a split should the UK seek – and more about the ideal long-term relationship that would suit both sides. An intelligent Brexit?