Government borrowing is even higher than expected and shoppers aren’t shopping, are the two pieces of bad news that chancellor Rachel Reeves has woken up to.
The Office for National Statistics (ONS) says the UK borrowed £17.4bn in October to cover gaps between tax income and spending – £3bn more than expected.
And we have just had the Retail Sales numbers for October showing a sharp fall of 1.1% month on month. Retailers say shoppers were waiting for Black Friday sales. With many companies relying on those sales next Friday, the Budget being just two days before is a little late in the day. Indeed, the long wait for this Budget has been blamed by many institutions for the lack of energy in the economy.
However, it was a mixed day for sterling yesterday, with small gains on the US dollar and little movement against the euro.
Also among the fresh load of data for the markets to ponder this morning, the GfK Consumer Confidence also fell. GfK’s consumer insights director said the public is preparing for difficult news next Wednesday.
It’s worth bearing in mind that all these numbers are even worse than the already bad predictions.
Still, there is plenty more news to come in. We will be getting the Purchasing Managers Index (PMI) coming through this morning, not just from the UK but from across the western world. Last month we started to see a real recovery in European business optimism, but will that continue?
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