Chancellor Jeremy Hunt attributed years of political instability to Brexit, acknowledging its adverse impact on the UK's economic stability. He likened the economic challenges to a "sprained ankle," disputing the characterization of a "broken leg," and defended the tax cuts outlined in his autumn statement. Hunt highlighted the additional challenges posed by the pandemic and expressed hope for increased stability moving forward, emphasizing its positive influence on policymaking.
New data from the Office for National Statistics reveals that UK homeowners with mortgages experienced the highest personal rate of cost inflation in the year to September. Interest rate increases negatively affected disposable income, leading to nearly one in 10 UK households failing to pay a major bill in the month to November 10, marking the highest level since April 2020.
A significant report by the Resolution Foundation and the London School of Economics’ Centre for Economic Performance indicates that British workers are losing out on £10,700 annually due to more than a decade of weak economic growth and high inequality. The report underscores a decline in UK living standards by as much as £8,300 per household compared to other affluent nations, prompting a call for an urgent reevaluation of economic strategy after 15 years of relative decline.
Recent data indicates that the Eurozone Purchasing Managers' Index (PMI) declined for the sixth consecutive month in November. The HCOB Eurozone Composite PMI Output Index, measuring both manufacturing and services sectors, remained below the 50.0 threshold, signaling a continual reduction in private sector output across the Eurozone. Although November's PMI showed a slight improvement from October, reaching 47.6 after the previous month's 46.5, it remains a significant indicator of economic decline in the region.
Despite concerns about a weakening job market under the strain of high interest rates, most business economists believe the U.S. economy could avoid a recession in the coming year. According to a survey by the National Association for Business Economics, only 24% of economists see a recession in 2024 as more likely than not. This sentiment aligns with the recent decline in job openings, a key measure of employer demand, by 617,000 to 8.7 million in October. This decrease is seen as a factor that could guide the Federal Reserve toward a 'soft landing,' aimed at taming inflation without triggering a recession.
The US news over the past few days strengthened the dollar slightly, however the Eurozone data saw the Euro weaken across the board. GBPUSD resides at 1.26, down from 1.27. EURUSD has moved from 1.10 down to below 1.08, whilst GBPEUR is up trading around 1.1670.
