Despite climbing towards the end of last week, the pound ended September roughly 4.0% down on the month against the US dollar and over 1.0% down on the euro.
Last week’s gross domestic product figures revealed the UK’s national debt is smaller than estimates thought, as a share of the economy. The Office for National Statistics announced outstanding public sector net debt totalled 97.9% of annual GDP in August 2023, down from an earlier estimate of 98.8%.
On Friday, economists heard the Euro area inflation rate fell to 4.3% in September from 5.2% in August, and below market forecasts of 4.7%. This decrease suggests the European Central Bank’s monetary tightening policy is working.
The inflation rates for both France and Italy remained unchanged in September, at 4.9% and 5.3%. Despite not increasing, the rates remain over double the European Central Bank’s 2% target.
Core PCE inflation in the US rose by 0.1% in August, the least since November 2022 and below market expectations of a 0.2% rise.
Late last week the Conservative party was asked to explain who knew of JCB boss, Anthony Bamford’s tax investigation and whether it will return the millions of pounds donated by the billionaire.
UK mortgage approvals fell to a six-month low as high interest rates cool the housing market.
The Bank of England has urged UK financial institutions it supervises to take care regarding loan default risks, as higher inflation and increased interest rates hit more vulnerable borrowers.
US personal income data increased by 0.4% in August, following a 0.2% rise in July and matching market forecasts. Personal spending also increased in August, by 0.4%, in line with market consensus, following an upwardly revised 0.9% rise in July. The largest categorical increase was in services, which saw a $47 bn increase in August, led by housing, transportation costs and healthcare.
Today, investors will be digesting manufacturing PMI results for the UK, most euro countries and the US, while this morning, economists will receive the Euro area’s unemployment rate, which is forecast to rise from 6.4% in July to 6.5% in September.
As for data this week, we will receive JOLTs job openings figures from the US on Tuesday afternoon, services and composite PMI results for the UK, most of Europe and the US, followed by Germany’s balance of trade on Thursday. The end of the week will bring the Halifax price index figures for the UK and for the US, non-farm payrolls and unemployment rate data.
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