Sterling heads into the weekend under a little bit of pressure, with more downbeat economic data sharpening minds ahead of the autumn budget (26 November).
The pound weakened by about half a cent against the euro and by slightly more against the US dollar over the course of Thursday’s action. That followed the results of a Bank of England survey, which provided a worrying insight into the nation’s ongoing stagflation.
Government insiders fear the Office for Budget Responsibility (OBR) will today release a damaging reassessment of its productivity forecasts. Even a small downgrade to the assumed rate would have a significant bearing on the chancellor’s wiggle room next month. Media reports claim that the OBR’s forecast will force Rachel Reeves to find another £20 billion to plug the fiscal shortfall.
British businesses are also slashing new staff hirings, with overall headcount growth slumping to zero in the three months to September – the joint lowest figure since the pandemic. Things are even worse in the United States, where hiring intentions hit their lowest level since 2008, according to a survey by recruiter Challenger, Gray & Christmas.
We had been expecting some data from the American labour market today, but the government shutdown has rendered that impossible. Instead, markets will have to make do with the September report from the services sector, which is expected to be marginally worse than the previous month.
The impasse in Washington is still holding firm, in case you were wondering. Neither side seems particularly motivated to get round the negotiating table, so until a breakthrough is brokered, Americans can expect some vital government agencies to remain shuttered.
And finally, it seems not even alcohol is safe from the ongoing wave of cyber crime. Japanese producer Asahi said the nation was just days from running out of its most popular beer after a cyber attack took its ordering and delivery system offline.
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