UK Inflation Remains Unchanged In September, Eyes On Powell Speech
UK CPI inflation remained unchanged at 6.7% in September on a year-to-year basis, according to data published by the Office for National Statistics (ONS). UK’s inflation is still the highest among the G7 countries group.
Commenting on the report, the UK’s chancellor said that “inflation rarely falls in a straight line, but if we stick to our plan then we still expect it to keep falling this year.” The British pound rose slightly against the US dollar after the report's release.
In other news, the Chinese economy grew by 1.3% in the third quarter, surpassing economists’ expectations. Economists speaking to Reuters suggested that the economy could grow by 5% this year in line with the growth target set by the government.
In Canada, consumer price inflation fell to 3.8% on a yearly basis in September, below analysts’ expectations of a 4% figure.
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Fed’s Powell To Deliver Speech In New York
The Federal Reserve’s head, Jerome Powell, will deliver a speech at the Economic Forum of New York on Thursday. Powell’s comments on the US economy could provide clues about the upcoming Fed board monetary policy decision on November 1st.
Economists at ANZ suggested that the Federal Open Market Committee (FOMC) could start cutting rates during the third quarter of 2024. In their report, they noted: “By then, we expect core inflation to be on a sustainable path towards target and there would be no reason for the FOMC to squeeze the economy with higher real rates.”
China PBoC Interest Rate Decision
On Friday, the PBoC will announce its decision on interest rates. The Chinese economy seems to have been struggling since the beginning of the year when the government decided to lift Covid-19 restrictions. Economists suggest that the Chinese central bank won’t raise borrowing costs this time.
Delivering a speech at the last International Monetary Fund (IMF) meeting, the PBoC’s Governor said that the central bank would provide continuous support to ride the uptick in economic momentum and boost domestic demand. He also mentioned that “positive factors in China’s economic operation are accumulating and the bright spots have increased and are expected to improve.”
UK Retail Sales In September
The September retail sales report will be the last set of UK data to be released by the Office for National Statistics (ONS). Market analysts expect retail sales to have remained flat, on an annualised basis, while expecting a drop of 0.1% on a month-to-month basis.
A British Retail Consortium (BRC) report released last week said that retail sales slowed in September as the high cost of living continues to weigh in on consumers’ budgets. The BRC survey showed retail sales increasing by 2.7% on a monthly basis, while in August the growth rate had come in at 4.1%. KPMG experts noted that “consumers will continue to seek out good deals, with price driving purchasing decisions. This is likely to be one of the most important golden quarters that we have seen in years, as for some in the sector, it could very much determine their future.”
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