Closing post
Time for a recap.
Evidence is growing that the UK economy is weakening, while the eurozone is also lurching deeper into trouble … as the US pushes ahead.
UK business activity shrank for the first time in over a year this month, according to the latest poll of purchasing managers, in a sign that corporate confidence has been hit by last month’s budget.
Chris Williamson, chief business economist at S&P Global Market Intelligence, says:
Business optimism has slumped sharply since the General Election, dropping further in November to hit the lowest since late 2022.
Companies are giving a clear ‘thumbs down’ to the policies announced in the Budget, especially the planned increase in employers’ National Insurance contributions.
UK retail sales also took an downturn turn last month, dropping by 0.7% in October led by a decline in turnover at clothing stores.
The weak data hit the pound, which dropped to a six-month low below $1.25 against the US dollar.
It all piles the pressure on Rachel Reeves, who last night held an event with senior women in finance in a bid to improve the “measly increase” in women in top jobs.
The picture is also deteriorating in the eurozone, where the services sector has now joined manufacturing in contraction. German business activity fell at the quickest rate for nine months, while the French economy is shrinking at the fastest pace since January.
But the US private sector is growing at the fastest pace in two and a half years, with American factories stockpiling products ahead of new tariffs on imports.
UK households face a 1% rise in energy bills in January, after regulator Ofgem lifted its quarterly price cap.
Charities warned that strugging families would find it hard to warm their homes this winter.
Cryptocurrency prices jumped, after SEC chair Gary Gensler announced he would step down in January, clearing the way for Donald Trump to appoint a more crypto-friendly successor.
Spain has fined five budget airlines, including Ryanair, a total of €179m (£150m) for charging passengers for hand luggage and seat reservations, prompting the Irish carrier to say banning the practices would “destroy” the ability to offer cheap tickets.
The chief executive of Northvolt has resigned, after the Swedish battery startup filed for bankruptcy protection in the US.
And in the media world, National World, the owner of the Scotsman and Yorkshire Post and underbidder in the auction for the Telegraph titles, has received a buyout proposal from its largest shareholder, Media Concierge.
Updated
Expectations for the US economy among Republican supporters have surged this month, while Democrats are much gloomier.
That’s according to the University of Michigan’s consumer sentiment index, just released, which highlights the two groups’ incongruous views of how president-elect Trump’s policies will influence the economy.
Overall, the consumer sentiment index rose by 1.3 points this month, up to 71.8 points from October’s 70.5. However, that’s also 1.3 points lower than the preliminary estimate earlier this month, of 73.
Surveys of Consumers director Joanne Hsu says:
Current conditions saw insignificant changes this month across the political spectrum, consistent with the fact that the resolution of the election exerted little immediate impact on the current state of the economy.
Ultimately, substantial uncertainty remains over the future implementation of Trump’s economic agenda, and consumers will continue to re-calibrate their views in the months ahead.
