This week, Jeremy Hunt attempted to lighten the mood for voters by reducing National Insurance. The early introduction of this tax cut raises the possibility of an election in early 2024 as the Conservatives weigh up whether this is long enough for workers to feel the benefit against the potential for a rate hike if inflation stays high. The Office for Budget Responsibility’s assessment of the outlook was lukewarm at best. It expects low growth this year and next, but says inflation will take until the second quarter of 2025 to return to target.
The outlook for the UK and the US rests in part on consumer confidence and how that translates to spending. Confidence has unexpectedly improved in the UK, but remains negative and there is another energy price hike coming in January. Meanwhile US consumer confidence has weakened slightly and some data points to a slowdown in retail spending. US markets were positive in advance of the Thanksgiving holiday and investors will be looking at whether this positivity carries through to the annual retail spending bonanza that is Black Friday.
For the following stories, please click on this link*
- UK: Chancellor targets growth and productivity improvements
- US: Markets in positive mood in advance of thanksgiving
- Oil: Tension between OPEC members as oil price falls
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