Closing post
And finally, here’s our analysis on today’s GDP report:
Rachel Reeves’s autumn budget is not simple: Britain’s economy is misfiring and things need turning around fast. Yet a fiscal consolidation on the scale the chancellor is expected to require could push in exactly the opposite direction.
The latest figures from the economy are hardly encouraging. Growth slowed from 0.3% in the second quarter to just 0.1% in the third, driven down in part by the cyber-attack on Jaguar Land Rover.
It is a potential doom loop scenario. Stronger public finances require a stronger economy. Yet large tax rises and spending cuts on 26 November could further squeeze activity amid an already weak growth outlook.
In the City, this has bond market investors worried. Yet so too does a budget that would not fully cover an expected shortfall of up to £30bn against the chancellor’s self-imposed fiscal rules. Inflation, currently at almost twice the Bank of England’s 2% target, must also be kept under control.
With growth weak, and confidence fragile amid budget uncertainty, it is clear the government’s No 1 mission to kickstart growth is in trouble. The economy shrank in September and flatlined in August. Real GDP per head – a key measure of living standards – showed no growth in the latest quarter.
More here, by my colleague Richard Partington:
The reopening of the US government hasn’t brought much cheer to Wall Street.
The main US stock indexes have opened lower, with the Dow Jones Industrial Average dipping by 102 points, or 0.2%, to 48,152 points.
Tech stocks are among the fallers, pulling the Nasdaq down by 1.1%.
Fawad Razaqzada, market analyst at City Index, says:
“After a stellar rally since April, technology shares look increasingly overvalued and overstretched, with sentiment tempered by a lack of fresh catalysts and a lull in economic data. It wouldn’t be surprising to see the Nasdaq 100 remain range-bound in the near term. Yet, it’s far too early to call a top in this cycle, especially with the underlying trend still supported by strong liquidity and investor enthusiasm for AI-driven growth.”
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