On Wednesday, UK headline CPI for October came in at 3.6%, easing slightly from the 3.8% peak saw through July, August, and September. This marks the first deceleration in price growth in five months.
Markets bounced back on Monday, shaking off last week’s tech-driven slump as optimism grew that a U.S. government shutdown may soon be resolved. In the U.S. the S&P 500 gained 1.5% whilst the tech heavy Nasdaq jumped up 2.3%, as investors piled back into tech stocks to take advantage of last week’s pull back.
Yesterday morning, Chancellor Rachel Reeves delivered a short statement to the press setting out her key priorities ahead of the Budget on the 27th of November.
Global equity markets kicked off the week on a strong footing after signs emerged that Washington and Beijing have agreed to pause their trade confrontation. The tariff increases on Chinese imports that were expected to land on the 9th of November now appear to be on hold.
UK inflation held steady at 3.8% in September, marking the third consecutive month at that level and delivering a welcome upside surprise for both markets and consumers. The breakdown showed food inflation easing further and price pressures moderating in recreational categories.
This week, headlines shouted loudly that the UK’s unemployment rate hit its highest level in four years, having ticked up to 4.8% in the three months to August.
Across the Eurozone, retail activity showed only marginal improvement in August, inching up by 0.1% – a weaker outcome than most economists had predicted. Year-on-year, sales were 1% higher, pointing to a modest degree of resilience in consumer spending.
Recent comments from Bank of Japan officials opened the door to further rate hikes, but fresh data may temper that stance.
Markets adopted a subdued tone this week as investors faced a limited flow of economic data. One notable development was news that US–India trade talks may become more complicated by the issue of India’s purchases of Russian oil – an unusual factor, given that such negotiations typically exclude third-party relationships.
The start of this week has brought with it a host of UK data that has allowed investors to speculate about the Bank of England’s interest rate decision on Thursday.
