The United Kingdom’s unemployment rate increased slightly from 5% to 5.1% in October. While in line with forecasts, that took the headline rate of joblessness to its highest level in over four years and close to the peak it reached in the months following the outbreak of the Covid-19 pandemic.
A relatively quiet, defensive mood prevailed across currency markets to start the week. Monday was light on data and investors appeared to brace for busier times ahead. Two interest rate decisions and key US data are the headline acts of what feels like an unusually impactful mid-December burst.
The Financial Conduct Authority (FCA) has proposed several areas of mortgage reform to make it easier for first-time buyers, pensioners and the self-employed to get on the housing ladder. The timing couldn’t have been better, coming just hours after a study by Rightmove found asking prices were £2,000 lower than a year ago in the four weeks to 6 December.
China’s economy showed more signs of trouble, spreading concern that the world’s second-largest economy is entering crisis territory. Industrial production and retail sales numbers came in well below forecasts in November. For consumers, a stronger Chinese yuan, low domestic demand and plummeting confidence have caused a curious period of disinflation in a wide range of goods.
Federal Reserve governor Stephen Miran criticised the central bank’s cautious approach to lowering interest rates. Miran, nominated to the board in August, argued overblown fears of “phantom inflation” were not reflective of economic forces.
The European Commission proposed scrapping its planned ban on combustion engines by 2035. Under a review published today, lawmakers in Brussels are set to allow car manufacturers to produce a limited number of traditional vehicles – around 10% of 2021 emissions levels a decade from now.
Overnight, European leaders were hopeful that meaningful progress had been made to end the war in Ukraine. But the news wasn’t all rosy. President Trump has reportedly pulled the plug on £31 billion of AI investment in the UK. He has also filed a $10 billion lawsuit against the BBC over its editing of a documentary on him.
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