The pound starts the day largely unchanged against the US dollar and slightly higher against the euro this morning. With little high-impact economic releases today, investors and economists look to the key data for guidance.
Retail sales volumes in the UK fell by -6% in October, following 4% growth a month prior according to the CBI Distributive Trades Survey. Retailers believe consumer spending declined due to uncertainty surrounding the autumn budget, which will take place tomorrow at 12:30pm.
For guidance on how top banks think the pound will react to the budget, download your free copy of our latest Quarterly Forecast.
Prime minister, Sir Keir Starmer confirmed that tax rises were on the way in a speech yesterday. He said, “borrowing will drive long-term growth. Tax rises will prevent austerity and rebuild public services.”
Starmer also confirmed that London commuters will be hit with a £1 increase on the current £2 bus cap, which will be replaced by a new cap until the end of 2025.
This morning, we heard that German consumer confidence rose to -18.3 heading into November from a marginally revised -21.0 a month prior. This reading is the highest in 31 months and overtook expectations of -20.5. This was largely influenced by improved income expectations and propensity to buy, which hit a two-year high.
This afternoon, the spotlight is on US JOLTs which refers to the number of open, unfiled positions on the last business day of the month. August broke a three-month downward cycle, so economists will look to the latest job openings stats for guidance on the state of the labour industry.
German carmaker Volkswagen announced plans to close three factories, job cuts and slice employee pay by 10% as weak sales and slow expansion in the electric vehicle sector start to take effect.
Tomorrow is a busy day that kicks off bright and early in the European session with various GDP stats for October, starting with France at 7:30am. Spain, France, Germany, Italy and the Euro Area figures are also expected, all before 1pm.
To protect your budget in a time of economic uncertainty ahead of the ill-fated budget, speak to your dedicated account manager today to discuss risk management strategies which may include a forward contract. Call us today on 020 7898 0541 to get started.
