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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden

Traders lift bets on UK interest rate cuts in 2024 after economy shrinks in October – as it happened

United Kingdom GDP Economy United States Sanjay Raja Recession The Bank of England
Office workers and commuters walking through Canary Wharf in London during the morning rush hour.
Office workers and commuters walking through Canary Wharf in London during the morning rush hour. Photograph: Victoria Jones/PA

Closing post

Time to recap…

City investors are pricing in a full percentage point of cuts to UK interest rates next year, after Britain’s economy shrank in October.

The money markets show that UK interest rates are forecast to have fallen to 4.25% by December 2024, down from 5.25% today – as the Bank of England prepares to reveal its final interest rate decision of the year.

Traders ramped up rate-cut expectations after UK GDP shrank by 0.3% in October, news which also knocked the pound by a third of a cent against the US dollar.

The fall in GDP sparked new concerns that the UK could be sliding into recession, with Labour’s shadow chancellor, Rachel Reeves, warning that the economy was going backwards.

Chancellor Jeremy Hunt said it was “inevitable GDP will be subdued” while interest rates were high to fight inflation.

Goldman Sachs and J.P.Morgan have both cut their forecast for Britain’s annual economic growth this year to just 0.5%, down from 0.6% before.

All sections of the UK economy shrank in October, with output in the “motion picture, video and TV production” subsector declining sharply.

Here’s the full story:

And here’s the rest of today’s business and finance news so far:

Analysis:Signals are flashing red for Rishi Sunak’s economic growth pledge

The construction industry faces a disastrous 2024 if the cost of borrowing remains high, my colleague Phillip Inman warns.

Professions that depend on the property market are likewise going to be hard hit, he points out, adding:

The October GDP figures show legal services contracted amid a sharp slowdown in the sale of commercial and residential properties.

No doubt the Bank of England’s monetary policy committee will view the monthly GDP drop as a foretaste of recession with some scepticism and will vote on Thursday to keep interest rates at 5.25%.

Eradicating inflation is likely to be worth a shallow recession in the view of most MPC members. It means a shallow recession is what we might get.

World Bank warns record debt levels could put developing countries in crisis

The World Bank calling for urgent action to prevent record debt repayments by the world’s poorest countries developing into a full-blown crisis, our economics editor Larry Elliott reports.

The Washington-based multilateral body said the escalating cost of servicing past borrowing caused by rising interest rates was siphoning money away from spending on health, education and tackling the climate crisis.

The Bank sounded the alarm in its latest International Debt Report, which showed the sharpest rise in global borrowing costs in four decades had pushed payments on the external debts of all developing countries to $443.5bn in 2022.

“Record debt levels and high interest rates have set many countries on a path to crisis,” said Indermit Gill, the World Bank Group’s chief economist and senior vice-president.

Tesla recalling 2 million US vehicles over Autopilot safeguards

Teslais recalling just over two million vehicles in the United States fitted with its Autopilot advanced driver-assistance system to install new safeguards.

The recall, which involves an ‘over the air’ software update, comes after a safety regulator said the system was open to “foreseeable misuse.”

Reuters has more details:

The National Highway Traffic Safety Administration (NHTSA) has been investigating the electric automaker led by billionaire Elon Musk for more than two years over whether Tesla vehicles adequately ensure that drivers pay attention when using the driver assistance system.

Tesla said in the recall filing that Autopilot’s software system controls “may not be sufficient to prevent driver misuse” and could increase the risk of a crash.

Acting NHTSA Administrator Ann Carlson told Reuters in August it’s “really important that driver monitoring systems take into account that humans over-trust technology.”

More here: Tesla recalling 2 million US vehicles over Autopilot safeguards

Updated

Pfizer shares tumble as 2024 revenue forecast disappoints

On Wall Street, shares in pharmaceuticals firm Pfizer are down 7% in pre-market trading after it issued disappointing revenues forecasts for next year.

Pfizer told investors it expects to bring in annual revenue of between $58.5bn and $61.5bn, compared with analysts’ average estimate of $63.17bn for 2024 sales.

This includes approximately $8bn in anticipated revenues for Comirnaty, which is its Covid-19 vaccine, and Paxlovid, its antiviral treatment for Covid.

According to Reuters, analysts were expecting sales of Comirnaty alone to be over $8bn, and another $5bn from Paxlovid.

Pfizer has also increased its cost-saving programme by $500m, and now expects to hit cost savings of $4bn per year.

US producer price inflation dips below 1%

Over in the US, producer price inflation has slowed, in another sign that cost pressures are easing.

The Producer Price Index for final demand rose by 0.9% in the year to November, new Bureau of Labor Statistics data shows. That’s down from a 1.2% year-on-year rise in October.

The drop was driven by cheaper energy products.

On a monthly basis, the PPI index was unchanged in November, following a 0.4% decrease in October and a 0.4% rise in September.

This should reassure US policymakers that inflation is cooling, after consumer price inflation dipped to 3.1% in November.

Updated

Why October's GDP reading is worrying

Today’s GDP reading of -0.3% month-on-month growth in October, is worrying for a least two reasons, says professor Costas Milas of Liverpool University.

He tells us:

First, it is consistent, in my view, with a quarter-on-quarter GDP growth of -0.2% for 2023Q4 based on the “follow the money argument” (see Chart below) where negative Divisia M4 growth throughout 2023 points (a) to GDP shrinking for 2023Q4 and then flatlining in 2024Q1, and (b) inflation falling further in the months ahead.

Second, the anemic performance of the UK economy raises serious questions about the actual unemployment rate in the UK economy.

Because of survey problems, the ONS does not currently provide up-to-date estimates of the UK unemployment rate. My worry is that when the ONS manages to sort out survey issues, it will come up with an unemployment rate reading which might be considerably (?) higher than 4.2%.

The fact that the UK economy is currently shrinking, together with the possibility that unemployment might be higher than what we currently believe, reinforces my belief that the Bank’s Monetary Policy Committe will be forced to cut its policy rate by March 2024, earlier than most economists think...

A chart showing UK GDP and money growth
A chart showing UK GDP and money growth Photograph: Professor Costas Milas

Updated

Some cheerier news: 962 former Wilko employees have been hired by Poundland, as the discount chain continues to reopen stores it acquired from its former rival.

In September, Poundland bought up to 71 Wilko shops after the chain fell into administration after running out of cash.

Poundland says it has now converted 64 former Wilko shops and expects to open remaining shops in the acquired units next year.

The discounter said 826 former Wilko employees have been hired to work on hourly paid contracts at the reopened shops, while a further 122 have been hired to work as store managers or assistant store managers.

A further 14 former Wilko workers have also been hired to work at Poundland’s main support centre in Walsall.

Updated

Following October’s 0.3% drop in activity, the economic forecasting group NIESR predict GDP will remain flat in the fourth quarter of this year.

They add:

Our early forecast for the first quarter of 2024 expects GDP to grow by 0.3 per cent, driven by the services sector. These forecasts remain broadly consistent with the longer-term trend of low, but stable economic growth in the United Kingdom.

Over in the energy sector, Opec has blamed “exaggerated concerns about oil demand growth” for the drop in energy prices last month.

Opec’s latest monthly report, just released, shows that oil prices fell 7.5% during November.

The group, which strugged to reach an agreement on voluntary production cuts last month, says:

Crude oil futures prices experienced a significant downturn, marked by heavy selloffs amidst a highly volatile futures market. Speculators played a major role in this trend, cutting their bullish positions sharply while increasing short positions.

The market dynamic was fuelled by exaggerated concerns about oil demand growth, which negatively impacted market sentiment.

Updated

In the City, gambling firm Entain is the top riser on the FTSE 100 share index today, after announcing its CEO’s surprise departure.

Jette Nygaard-Andersen is leaving Entain, whose brands include Ladbrokes, Coral and BetMGM, is departing, shortly after it agreed a settlement of more than £600m following an investigation into alleged bribery at a business it owned in Turkey.

There were reports last week that Nygaard-Andersen was under pressure from activist shareholders and mounting internal discontent over her leadership.

Shares in Entain are up 4.6% so far today, at 843p.

Andrew Jones, Portfolio Manager at Janus Henderson Investors, says October’s GDP report is disappointing:

“UK GDP was weaker than expected in October, declining 0.3% month on month. This weakness was widespread with declines across services, construction and manufacturing.

This loss of momentum after modest growth in September is clearly disappointing and will likely lead to downgrading of UK GDP growth for Q4 and 2024.

With wage growth also slowing it is starting to look more likely that interest rates could start to be cut in the middle of 2024.”

Ofcom warns broadband companies over customer confusion

The telecoms regulator has told broadband companies that they must stop misleading consumers by claiming to offer the fastest internet speeds if their network can’t actually deliver the service, my colleague Mark Sweney reports.

Just over half of UK homes, more than 15 million, have the potential to buy contracts that allow them access to the fastest internet speeds built on full-fibre connections.

However, some internet providers offering services on slower technologies - such as copper or cable or part-fibre networks - have misled consumers by claiming they are “fibre” in contracts.

Ofcom has issued new guidance telling broadband companies that they are only allowed to use the term “fibre” if the technology runs all the way to a consumers’ home, which offers the fastest possible internet speed.

“Today’s guidance is designed to address customer confusion surrounding the different network technologies underpinning broadband services,” said Selina Chadha, director of connectivity at Ofcom, adding:

“By requiring clear, straightforward information on network technologies, consumers will have a better understanding of the characteristics of their broadband service, so that they can compare services more easily and choose the best one to meet their needs.”

Ofcom said that it is clear that consumers are confused as its research shows that only 46% of customers it surveyed who reported that they were on full-fibre broadband were living in areas where it is actually available.

More than a quarter of broadband consumers (27%) said that they lacked confidence in understanding the language and terminology used by internet service providers.

Ofcom said that a description of the underlying technology used to deliver broadband should be included at the point of sale on the website, and before the final purchase in contract information, and in the contract summary.

Broadband providers have until September next year to implement the guidance.

Bloomberg says that traders “ramped up bets on interest-rate cuts” by the Bank of England next year after today’s October GDP report (as we covered in the earlier post).

The soft GDP data reinforced the view that policymakers won’t be able to keep monetary policy tight for so long.

Bloomberg adds:

Markets priced 97 basis points of easing in 2024, the most in the current cycle. That means three quarter-point cuts are fully baked in and there’s an 85% chance of a fourth — an outcome that would take borrowing costs to 4.25%.

Full story: UK economy shrinks unexpectedly as households feel squeeze

Britain’s economy shrank unexpectedly by 0.3% in October as households and businesses came under growing pressure amid the cost of living crisis, raising the chances of a recession.

The Office for National Statistics said that gross domestic product (GDP) fell on the month, after growth of 0.2% in September, with contractions across all main sectors of the economy. City economists had forecast zero growth.

The UK’s dominant services sector was the biggest driver of the fall in output, with declines in IT, legal firms and film production. These were compounded by widespread falls in manufacturing and construction after poor weather led to a drop in activity.

Paul Dales, the chief UK economist at the consultancy Capital Economics, said the figure “suggests that the economy may go nowhere again in the fourth quarter, or perhaps is in the mildest of mild recessions”.

More here.

Traders predict UK interest rates could fall to 4.25% by December 2024

City investors are now pricing in around four quarter-point cuts to UK interest rates from the Bank of England next year, as they digest the drop in GDP in October.

The money markets are currently indicating that UK interest rates will have fallen to around 4.25% by December 2024, down from 5.25% today.

The first cut is expected as early as May next year (to 5%), with further reductions being pencilled in for the second half of 2024.

If the UK does slide into a mild recession, as some economists are warning, then there would be serious pressure on the BoE to cut rates.

But the Bank might push back against these rate cut expectations tomorrow, when it sets UK borrowing costs for the last time this year.

Matthew Ryan, head of market strategy at global financial services firm Ebury, says:

“We expect the Bank of England to hold rates steady for the third straight meeting on Thursday, with the MPC to once again stress that it is too soon to even think about the possibility of policy easing.

We think that markets are getting carried away with the extent of policy easing that will be required in 2024.

Six of the Bank’s policymkakers are expected to vote to leave interest rates on hold tomorrow, outvoting three who are tipped to push for a rise to 5.5%.

Updated

The 0.5% drop in output in the UK construction sector was driven by a fall in new building projects.

Private housing new work (ie: building homes) shrank by 5.2%, as house builders cut back due to weaker demand, while there was a 1.2% drop in private commercial new work.

In the August-October quarter, construction output is estimated to have fallen by 0.3%.

October was a difficult month for UK manufacturers.

UK production output is estimated to have fallen by 0.8% in October, driven by “widespread declines in manufacturing output”, the ONS says.

That follows no growth in September and a fall of 0.5% in August.

Here’s a handy breakdown of the GDP report, from Sky News’s Ed Conway:

Hunt: inevitable GDP will be subdued whilst interest rates fight inflation

Jeremy Hunt has blamed high interest rates for the UK economy shrinking in October.

The chancellor says:

“It is inevitable GDP will be subdued whilst interest rates are doing their job to bring down inflation.

“But the big reductions in business taxation announced in the autumn statement mean the economy is now well placed to start growing again.”

Updated

Goldman Sachs and JP Morgan cut UK's 2023 growth forecast

Two Wall Street titans have lowered their forecasts for UK economy growth this year, following October’s unexpected contraction of 0.3%.

Goldman Sachs and J.P.Morgan have both cut their forecast for Britain’s annual economic growth to 0.5%, down from 0.6% before, Reuters reports, adding:

For 2024, Goldman Sachs expects the economy to expand by 0.6%, down from previous outlook of 0.7%, while J.P.Morgan cut the growth forecast to 0.2% from 0.4%.

As well as the Hollywood strikes, Britain’s TV and movie sector has also been hit by a slump in commissions from homegrown broadcasters.

Those broadcasters have been hit by a fall in advertising spending, which depletes their budgets, and are also ploughing through a glut of content completed after the pandemic.

We reported in September that observers were asking whether the UK broadcasting industry is facing a temporary post-pandemic reset or an existential crisis, as production slumped….

… and followed up in November with a warning that the industry could suffer a brain drain of skilled talent, as film and TV makers were pushed into other jobs.

This will have contributed to the drop in output in the “motion picture, video and TV production” part of the services economy (see earlier post) in October.

The strikes held by Hollywood’s actors and writers earlier this year are one factor which hit the TV industry in October, points out Investec.

The strikes, which were resolved by early November, curtailed production of some new movies.

Investec say:

Given the dominance of the service sector, its output fall alone accounted for more than half of the decline in total GDP. Within it, the sub-sector that made the largest negative contribution to GDP growth was the information and communications industry, which the ONS in turn attributed primarily to falling value added in consumer programming, consultancy and related activities on the one hand and in motion picture, video and TV production on the other. We wonder whether there were some knock-on effects on the latter from the Hollywood strikes that affected the pipeline of production. Still, that is by no means the entire story.

Consumer-facing services, the laggard in the post-pandemic recovery, have seen value added shrink for four consecutive months now and are yet to regain their pre-pandemic level.

Wet weather in October was another factor, they add:

Indeed, it was ‘the equal-sixth wettest October on record for the UK in a series from 1836’, as per the Met Office, accompanied by strong winds. This is said to have negatively affected construction, retail, pubs and tourism.

But again this is at best a partial explanation: most of the fall in industrial production for instance reflected a hefty drop in manufacturing output (down 1.1% on the month), where weather effects should have played no role. And although new work within construction fell by 1.7%, repair and maintenance posted a rise of 1.3%, despite the weather conditions.

October’s drop in GDP isn’t expected to jolt the Bank of England into a shock interest rate cut tomorrow.

The City reckon the BoE is certain to leave rates on hold at 5.25% – it’s a 99.9% probability, according to money market pricing.

Charles Hepworth, Investment Director at GAM Investments, says the Bank will be focused on inflation (which was still double its target in October, at 4.6%):

“A bigger drop in activity for the UK economy was seen this morning with GDP for the month of October registering a 0.3% drop on the month, more than the 0.1% drop expected by economists. Industrial production dropped 0.8% against expectations of a 0.1% drop while manufacturing fell more by 1.1% when it was expected to remain flat. This means in the three months to October, overall output was zero, not what the Chancellor was hoping for.

While this doesn’t signify a recession is here, it does raise questions of whether it isn’t far off and this stagnant picture of the UK economic performance will keep up the pressure on the Bank of England to begin to cut rates next year. Tomorrow, we have the Bank’s interest rate decision but don’t expect any change right now from the Bank, with inflation pressures outweighing any downturn pressure.”

Capital Economics: Economy may be in the mildest of mild recessions.

Capital Economics, the City consultancy, warn that the UK may be in “the mildest of mild recessions”.

Their chief UK economist, Paul Dales, told clients this morning:

The 0.3% m/m fall in real GDP in October (consensus 0.0%, Capital Economics forecast: -0.2%) suggests that the economy may go nowhere again in Q4 or perhaps is in the mildest of mild recessions.

That may nudge the Bank of England a little close to cutting interest rates, although when leaving rates at 5.25% tomorrow the Bank will probably push back against the idea of near-term rate cuts.

The weakness in October was not due to widespread strikes as there were fewer working days lost to strikes in September than in October (131,000 versus 231,000), but it may partly be due to the unusually wet weather.

That said, the weakness was broad based, which indicates that the ongoing drag from higher interest rates is more than offsetting any boost from the rise in real wages.

Recession indicators "flashing red" after GDP report

October’s fall in GDP means the spectre of recession will hover over the UK economy this winter.

Thomas Pugh, economist at audit, tax and consulting firm RSM UK, says

‘The 0.3% m/m contraction in GDP in October, coming on the back of flatlining growth in Q3, has our recession warning indicators flashing red. However, growth should pick up over the rest of the quarter as a sharp fall in inflation, strong wage growth and government transfers to low-income households all give consumer spending a boost. As a result, we expect Q4 to look more like a repeat of Q3 than the start of a recession.

‘In any case, the big picture is still one of a stagnating economy. We doubt growth will materially pick up until towards the end of next year, meaning that the spectre of recession will hang over the UK economy for a long time yet.

Rob Morgan, chief investment analyst at Charles Stanley Direct, says the UK economy continues to teeter on the edge of recession, adding:

Having eked out some marginal growth in the first and second quarters of 2023, and flatlining in the third, the UK economy contracted by 0.3% in October as higher interest rates weighed on activity.

Particularly wet weather during the month was cited as a negative factor, but that doesn’t change the bigger picture of an economy flatling with risk to the downside. This contraction could herald the start of a mild recession, and at the very least it shows the economic resilience shown earlier in the year is wearing off in the face of rising inflation and borrowing costs.

Charts: How service sector struggled in October

The UK services sector shrank in October, by 0.2%, for the first time since July.

The main driver was the information and communication sector, where activity fell by 1.7%. That was driven by weaker output in the computer programming, consultancy, and movie, video and TV production sector.

Professional, scientific and technical activities fell by 0.7%, led by a 2.8% drop in legal work.

UK GDP for October 2023
UK GDP for October 2023 Photograph: ONS
A chart showing UK GDP for October
A chart showing UK GDP for October Photograph: ONS

NHS strikes caused less disruption to the economy in October than September, according to today’s GDP report.

It shows that human health and social activities work grew by 0.4% in October 2023, driven by a growth of 0.5% in human health activities.

The ONS says:

There were three days of coordinated industrial action by junior and senior doctors in October 2023, where NHS England news reported that 118,026 appointments were rescheduled. This is less than the four days of strikes in September 2023, where another NHS England news article reported that 129,913 appointments were rescheduled.

There were also more Covid-19 vaccinations in October than September, as the latest vaccination campaign peaked.

Reeves: Economic growth is going backwards

Rachel Reeves, Labour’s Shadow Chancellor of the Exchequer, has warned that economic growth is ‘going backwards’, after GDP shrank 0.3% during October.

“Rishi Sunak ends the year having failed to deliver on his own promise to grow the economy. Economic growth is going backwards leaving working people worse off.

“After thirteen years the Conservatives have failed on the economy and after the chaos of the past few weeks Rishi Sunak is clearly too weak to deliver for Britain.

“Under Keir Starmer’s leadership the Labour Party has changed and is now the only party with a long-term plan to grow our economy, cut bills and make working people better off.”

Sunak could point out that the economy has grown (just) on an annual basis, with monthly GDP 0.3% larger in October than in October 2022.

But that’s a very anaemic result, a long way below trend growth.

The fall in UK GDP in October raises fears that the economy could shrink in the final three months of 2023.

That would put Britain on the brink of recession.

Ben Jones, CBI Lead Economist, says:

“Output was weaker than expected in October, raising the prospect that the UK could see a small contraction over the fourth quarter as a whole. CBI business surveys suggest private sector activity will be flat into the New Year, with the labour market also softening.

“Businesses are gearing up for another tough year ahead. Faced with weak demand and ongoing pressures on costs, companies are taking a hard look at their overheads and pursuing a cautious approach to staffing levels and investment.

“With an election on the horizon, it’s important to avoid adding any extra layers of uncertainty to the business environment. Seeking as much consensus as possible on growth-enhancing measures, such as speeding up planning and grid connectivity or policies to encourage innovation and tech adoption, would help to build confidence and unlock further investment.”

Pound drops after GDP disappointment

The pound has fallen, following the news that Britain’s economy shrank by 0.3% in October.

Sterling is down a third of a cent against the US dollar today, to $1.2525.

Traders may be concluding that the Bank of England is more likely to cut interest rates in 2024, if the economy is weakening.

Lindsay James, investment strategist at Quilter Investors, says:

“UK GDP fell 0.3% month-over-month in October, down from 0.2% in September and missing estimates, piling the pressure on the Bank of England ahead of Thursday’s interest rate decision.

While no rate cuts are expected tomorrow, or for some time, it will be crucial to see how the BoE is monitoring economic growth going forward and what that might mean for the path of interest rates. Calls for rate cuts are likely to grow stronger should this sort of economic data persist.

Updated

Bad weather was one factor hitting the UK economy, reports ONS Director of Economic Statistics Darren Morgan.

Morgan says:

“Our initial estimates suggest that GDP growth was flat across the last three months. Increases in services, led by engineering, film production and education – which recovered from the impact of summer strikes – were offset by falls in both manufacturing and housebuilding.

“October, however, saw contractions across all three main sectors. Services were the biggest driver of the fall with drops in IT, legal firms and film production - which fell back after a couple of strong months.

These were also compounded by widespread falls in manufacturing and construction, which fell partly due to the poor weather.”

UK economy shrank 0.3% in October

Newsflash: The UK economy contracted in October, with the country’s services, production and construction sectors all shrinking.

UK GDP contracted by 0.3% on a monthly basis, new data from the Office for National Statistics shows, following growth of 0.2% in September.

That’s worse than 0% change in GDP expected by economists for October.

The ONS says:

  • Services output fell by 0.2% in October 2023, driven by a fall in information and communication, and was the main contributor to the fall in growth in GDP; this follows growth of 0.2% in September 2023.

  • Production output fell by 0.8% in October 2023, driven by widespread declines in manufacturing, after showing no growth in September 2023.

  • The construction sector fell by 0.5% in October 2023 after growth of 0.4% in September 2023.

Over the last quarter, GDP was unchanged, the ONS says.

Updated

Sanjay Raja, UK economist for Deutsche Bank, expects this morning’s GDP report (due at 7am) will show output flatlined in October, after a surprise jump of 0.2% in September.

Raja says:

How will GDP breakdown in October? We see both services and industrial production coming in flat (0% m-o-m). Construction output, however, we think will shrink – albeit marginally. Risks to our forecast are skewed marginally to the downside.

And looking further ahead, Raja predicts the economy will grow slightly in the final quarter of this year:

We expect Q4-23 GDP to edge up by 0.1% q-o-q. The bad news? Recession clouds remain, with around half the Bank of England’s rate hikes yet to feed through into the real economy. There is some good news emerging, however. Recession clouds are starting to clear away with recent survey data turning markedly less pessimistic.

We continue to think that the UK economy will avoid a recession next year, instead growing by 0.3% in 2024. But sluggish growth is here to stay. We see the economy growing by only 0.1% in H1-24, before picking up steam in H2-24 and beyond.

Introduction: It's UK GDP Day

Good morning. We’re about to learn how the UK economy performed in October.

At 7am, the Office for National Statistics will publish its first estimate for October’s UK GDP.

And City economists fear it will be an unimpressive report, with growth expected to have flatlined during the month.

That would follow zero growth in the third quarter of 2032, as the UK economy stagnated under the effect of high interest rates.

Michael Hewson, chief market analyst at CMC Markets UK, says:

With the UK having just about avoided a contraction in Q3 some of the more recent economic data as we head into Q4 has shown a modest improvement, raising the prospect that the UK economy might avoid a recession at the end of this year.

When you consider that a year ago both the IMF and the Bank of England were predicting a long recession that is no small feat.

Today’s GDP report comes a day before the Bank of England announces its final scheduled interest rate decision of 2023; it’s expected to leave rates on hold at 5.25% at noon tomorrow.

Later today, the US central bank will set interest rates – and is also forecast to keep rates at current levels. But investors around the world will be watching for hints as to when, and how fast, the Federal Reserve might start cutting rates.

The agenda

  • 7am GMT: UK GDP report for October

  • 7am GMT: UK balance of trade for October

  • 10am GMT: Eurozone industrial production index for October

  • 1.30pm GMT: US PPI index of producer price inflation for November

  • 7pm GMT: US Federal Reserve sets US interest rates

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