Sterling had a mixed day on Tuesday, trading largely unchanged against the euro but falling further against a rampant US dollar. Yesterday’s main event came in Liverpool, where Andy Burnham made a much-anticipated address to the Labour party conference.
There were a number of significant points to pick through. Most importantly (and controversially), the prime minister confirmed rumours that he wanted to dispense with the triple lock should Labour win the next election, effectively shifting to a double lock that would see pensions increase in line with either inflation or by 2.5%.
There was no shortage of boldness in the hour-plus speech. From electoral reform and a new care system to closer ties to Europe, Burnham set out an ambitious change agenda. The question is whether the electorate will sign up, or if it will give investors cold feet. Another daily rise in borrowing costs demonstrated this will not be a simple task.
In fairness, borrowing costs continued to rise across the world yesterday. The yield on long-term US debt hit its highest level in close to 25 years amid little sign of progress in talks to end the energy crisis.
A sharp fall in the price of oil overnight to around $95 to the barrel reflected efforts to restart the flow of supplies through the Middle East. The United States released more strategic reserves into the market, while the resumption of exports through Saudi Arabia have helped crude oil shipments approach their pre-war levels.
There were also a pair of big news stories from the world of AI. Anthropic, expected to be one of the hottest entries to the stock market ever, warned in an investor prospectus of the ‘existential risks to humanity’ its technology posed – surely the first such admission from a company lining up an IPO. OpenAI meanwhile pulled the release of its latest model over security fears.
The economic schedule gets busy from today. Inflation data from the eurozone and America will be closely watched, as will the latest labour data from across the Atlantic, which could either amplify or challenge the US dollar’s recent gains.
GBP: Business investment provides a boost
For the second consecutive quarter, business investment in the United Kingdom increased by more than expected. Although the 1.8% expansion in the second quarter was below the previous 3%, there were encouraging signals that corporate spending is holding firm. Across the year as whole, investment has increased by over 5%, smashing estimates of 0.8%.GBP/USD: the past year
EUR: French inflation runs hot
France's headline consumer price inflation shot up from 2.4% to an annualised 3% in September, beating forecasts of 2.8% and raising the pressure on the European Central Bank. Italy and Germany report their own inflation data later today before attention turns to the eurozone as a whole tomorrow.GBP/EUR: the past year
USD: Taking jobs slowdown in its stride
The number of job openings fell by over a quarter of a million in July, but that failed to dent the US dollar’s relentless rise. Sky high energy prices and the possibility of aggressive action by the Federal Reserve have seen the dollar strengthen by almost two cents against the pound and the euro over the course of a single week.USD/GBP: the past year
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