Your October guide to the UK economy, giving you a monthly overview of the major trends impacting the UK's main business sectors.
Autumn brings unsettled economic conditions
Resilient economic data has recently driven markets to accept that central banks are unlikely to bring down rates any time soon, with rates likely to plateau at their highest levels since the financial crisis. US Treasury yields reached a 16 year high on 6th October following the publication of unexpectedly strong jobs data in the US. Markets in the UK and Eurozone have mirrored US trends, although to lesser degrees, given that growth performance is more lacklustre in both regions. These developments in the near-term raise borrowing costs for government, particularly pertinent in the UK as we look towards the Autumn Statement on the 22nd November. However, it is worth noting that UK public sector borrowing this financial year is £11.4 billion below the OBR’s Spring forecast, reflecting stronger than expected pay growth driving income tax receipts, while strong VAT receipts are likely to reflect strong real-terms consumer spend