This morning, UK headline CPI for November was released, coming in below expectations at 3.2%, down from 3.6% in October. The slowdown was driven by weaker food and core goods inflation, which helped ease overall price pressures.
This week, traders have the Fed’s last monetary policy meeting of the year in focus (a decision will be made by Wednesday). The Fed has a duty to cater to their dual mandate of stability in price growth and maintain strength in the labour market.
On Monday, fresh data showed that China’s factory activity improved marginally in November, although it remained in contractionary territory. The composite PMI slipped to 49.7, signalling ongoing weakness – since readings above 50 indicate expansion, while those below reflect contraction.
On Tuesday, the Confederation of British Industry published a survey showing that confidence among British retailers has fallen compared with a year ago, alongside a slowdown in retail sales. The indicator measuring how retail sales have changed over the past year slipped to -32 in November from -27 in October.
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.
