Investing.com - European stock markets traded higher Monday, with investors cautiously awaiting the latest policy-setting meeting by the European Central Bank later in the week.

At 03:35 ET (07:35 GMT), the DAX index in Germany traded 0.8% higher, the FTSE 100 in the U.K. rose 0.9% and the CAC 40 in France climbed 1%.

ECB meeting in full focus

The ECB meets on Thursday, and investors are very uncertain of the outcome as price pressures remain elevated while data shows economic activity is now slowing sharply.

The latest illustration of the deteriorating economic outlook is expected to come from Italy later Monday, with industrial production in the eurozone’s third largest economy expected to have fallen 0.3% on the month in July, an annual drop of 1.7%.

Data released last week showed that gross domestic product in the eurozone grew just 0.1% in the second quarter compared to the previous three months, while consumer prices in Germany, the dominant economy in the eurozone, climbed annually 6.1% in August, more than three times higher than the central bank’s medium-term 2% target.

The ECB has raised rates at each of its past nine meetings and policymakers are now debating whether to raise the deposit rate again, to 4%, or pause.

The difficulty the policymakers have is if they feel further tightening is necessary then September is likely the last chance.

"If you cannot get yourself to hike in September, the case will not be stronger in October as economic data will likely worsen, and inflation in September will come lower quite a bit," said UBS chief European economist Reinhard Cluse.

U.S. inflation data also in spotlight

European investors will also be keeping an eye on the economic events across the pond this week, with key U.S. inflation data due in the form of the latest consumer price index on Wednesday and producer price index on Thursday.

These readings come after a string of stronger-than-expected economic numbers last week renewed worries that the U.S. Federal Reserve could raise rates more than previously expected.

SocGen launches private debt fund

In the corporate sector, Societe Generale (EPA:SOGN) stock rose 1.7% after the French lender announced plans to launch a private debt fund, along with asset manager Brookfield Corp., targeting total volume of €10 billion (€1 = $1.0732) over the next four years.

The fund "will have a positive impact on the real economy", SocGen Chief Executive Slawomir Krupa said in a press release.

Elsewhere, the tech sector remains in the spotlight after Alibaba Group (NYSE:BABA) announced outgoing chief executive Daniel Zhang will also step down as the head of its cloud unit.