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Introduction: UK GDP report for October coming up....
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The important thing about last month’s budget is that we now have certainty, as one FTSE 100 CEO told me last week; no more endless speculation about which taxes might rise, for example.
But this morning, we’ll learn how much economic damage was caused by budget uncertainty in the run-up to the November’s fiscal event.
October’s GDP report, due to be released at 7am, is expected to show the economy strugled back to growth after a small contraction the previous month. GDP is forecast to have risen by 0.1% in October, having shrunk by 0.1% in September.
The restart of operations at Jaguar Land Rover’s factories in early October, after a cyber attack, should spur activity higher in the manufacturing sector.
On the other hand, though, the swirling speculation around what might be in the budget has hurt consumer sentiment and business investment; that could show up in the data too.
Michael Brown, senior research strategist at brokerage Pepperstone, points out that that this monthly data can be volatile:
On the data front, this morning’s UK GDP stats are set to show the economy having stagnated in October, largely as a result of pre-Budget uncertainty freezing business investment and consumer spending alike, though the monthly data remains very noisy indeed, with relatively little by way of signal able to be extracted from the report.
We’ll see what we can dig out of it, though.
The agenda
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7am GMT: UK GDP report for October
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7am GMT: UK trade report for October
-
7.45pm GMT: French inflation report for November
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8am GMT: Spanish inflation report for November
-
1.30pm GMT: US national activity index for September
-
4pm GMT: Russia’s GDP report for Q3
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Deutsche Bank’s chief UK economist, Sanjay Raja, suspects the impact of budget uncertainty will “linger” through most of the last quarter of the year.
Raja told clients this week:
After a slip up in September, we expect the first tranche of Q4-25 data to err more on the sluggish side - particularly when it comes to underlying growth. But a rebound in auto-manufacturing, following the cyber attacks on Jaguar Land Rover, will likely see the manufacturing sector bounce back into positive territory. Stronger oil and energy output will also help lift activity. But we don’t expect the services sector - the UK’s growth engine - to move. Construction output, we think, will also contract. Altogether, we expect GDP to edge up by only 0.1% m-o-m.
Where to next? We have revised down our Q4-25 GDP growth projection from 0.2% q-o-q to 0.1% q-o-q. Budget uncertainty, we expect, will linger for much of Q4-25, negatively impacting the labour market, and consequently, spending. Business investment, we expect, will also be dampened, as a result. Overall, we see 2025 GDP growth at 1.4% (unchanged relative to our prior expectations).
Introduction: UK GDP report for October coming up....
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The important thing about last month’s budget is that we now have certainty, as one FTSE 100 CEO told me last week; no more endless speculation about which taxes might rise, for example.
But this morning, we’ll learn how much economic damage was caused by budget uncertainty in the run-up to the November’s fiscal event.
October’s GDP report, due to be released at 7am, is expected to show the economy strugled back to growth after a small contraction the previous month. GDP is forecast to have risen by 0.1% in October, having shrunk by 0.1% in September.
The restart of operations at Jaguar Land Rover’s factories in early October, after a cyber attack, should spur activity higher in the manufacturing sector.
On the other hand, though, the swirling speculation around what might be in the budget has hurt consumer sentiment and business investment; that could show up in the data too.
Michael Brown, senior research strategist at brokerage Pepperstone, points out that that this monthly data can be volatile:
On the data front, this morning’s UK GDP stats are set to show the economy having stagnated in October, largely as a result of pre-Budget uncertainty freezing business investment and consumer spending alike, though the monthly data remains very noisy indeed, with relatively little by way of signal able to be extracted from the report.
We’ll see what we can dig out of it, though.
The agenda
-
7am GMT: UK GDP report for October
-
7am GMT: UK trade report for October
-
7.45pm GMT: French inflation report for November
-
8am GMT: Spanish inflation report for November
-
1.30pm GMT: US national activity index for September
-
4pm GMT: Russia’s GDP report for Q3
