{"id":2516,"date":"2021-10-25T10:55:38","date_gmt":"2021-10-25T09:55:38","guid":{"rendered":"https:\/\/new.contentdeployment.co.uk\/tomd\/?p=2516"},"modified":"2022-07-05T14:10:06","modified_gmt":"2022-07-05T13:10:06","slug":"news-in-review-28","status":"publish","type":"post","link":"https:\/\/new.contentdeployment.co.uk\/tomd\/2021\/10\/25\/news-in-review-28\/","title":{"rendered":"News in Review"},"content":{"rendered":"
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 \u201cGrowth is being accompanied by an\nunprecedented rise in inflationary pressures\u201d<\/em><\/strong><\/p>\n<\/div>\n\n

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A closely\nmonitored survey, released last week, suggests the UK economy unexpectedly\nregained momentum during October. The preliminary reading of the IHS\nMarkit\/CIPS Composite Purchasing Managers\u2019 Index (PMI) rose to 56.8, up from\n54.9 in September. This represents the largest monthly increase since May and\nbeat the consensus forecast in a Reuters poll of economists which had predicted\na decline to 54.0. <\/strong><\/p>\n<\/div>\n\n

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Commenting on the findings, IHS Markit Chief\nBusiness Economist Chris Williamson said the economy \u201cpicked up speed again\nin October\u201d<\/em>, although he did strike a note of caution adding, \u201cthe\nexpansion is looking increasingly dependent on the service sector, which in\nturn looks prone to a slowdown amid the recent rise in COVID-19 cases.\u201d <\/em><\/p>\n<\/div>\n\n

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Mr Williamson also noted that the Index reported\nthe fastest rate of input price inflation since its inception in 1998, fuelled\nby higher wages and supply shortages. He concluded, \u201cGrowth is being\naccompanied by an unprecedented rise in inflationary pressures, which will\ninevitably feed through into higher consumer prices.\u201d <\/em><\/p>\n<\/div>\n\n

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Inflation likely to hit 5%<\/strong><\/p>\n<\/div>\n\n

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The latest PMI data has added to speculation that the Bank of England\n(BoE) will soon need to raise interest rates to guard against inflationary\nexpectations becoming entrenched. In comments published in last Thursday\u2019s\nFinancial Times, the BoE\u2019s new Chief Economist Huw Pill, warned inflation is\nlikely to hit 5% in the coming months and said the question of whether to raise\nrates would be a “live”<\/em> one when the Monetary Policy Committee\n(MPC) next convenes on 4 November. <\/p>\n<\/div>\n\n

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Mr Pill said, \u201cI would not be shocked \u2014\nlet\u2019s put it that way \u2014 if we see an inflation print close to or above 5%. And\nthat\u2019s a very uncomfortable place for a central bank with an inflation target\nof 2% to be.<\/em>\u201d However, the Chief Economist described\nNovember\u2019s MPC decision as “finely balanced”<\/em> and was at pains\nnot to suggest any need to move rates much higher than their pre-pandemic level\nof 0.75%. <\/p>\n<\/div>\n\n

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State Pension rise<\/strong><\/p>\n<\/div>\n\n

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Last Wednesday\u2019s announcement that inflation, as measured by the\nConsumer Prices Index (CPI), had risen by 3.1% in the year to September, means\nretirees now know by how much the State Pension will increase from next April.\nFollowing the government\u2019s decision to suspend its triple lock guarantee for\none year, September\u2019s CPI rate will be used to calculate the uplift. As a\nresult, the value of the basic State Pension will increase in April 2022 from\n\u00a3137.60 to \u00a3141.85 per week, while the full new State Pension will rise from\n\u00a3179.60 to \u00a3185.15 per week.<\/p>\n<\/div>\n\n

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Retail sales down again<\/strong><\/p>\n<\/div>\n\n

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Official data\nreleased last Friday showed retail sales unexpectedly fell for the fifth\nsuccessive month, with volumes down 0.2% in September. Although sales volumes\nremain above pre-pandemic levels, this latest fall marks the longest\nconsecutive run of monthly declines since records began in 1996. <\/p>\n<\/div>\n\n

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Responding to the\ndata, British Retail Consortium Chief Executive, Helen Dickinson said, \u201cRetailers\nwill be concerned by the slump in sales, just as they begin their preparations\nfor the all-important Christmas period. Fuel shortages, wet weather, and low\nconsumer confidence all contributed to lower consumer demand, with household\ngoods, furniture and books all hit particularly hard.\u201d<\/em> <\/p>\n<\/div>\n\n

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Public borrowing\nlower than expected<\/strong><\/p>\n<\/div>\n\n

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The latest public sector finance statistics,\nreleased last Thursday, showed that government borrowing remains on a downward\ntrajectory. Total borrowing across the first six months of the current\nfinancial year fell to \u00a3108.1bn, over \u00a3100bn less than the figure recorded\nduring April-September 2020. While this is still more than triple the\npre-pandemic level, borrowing this year has fallen more quickly than economists\nexpected, which will give the Chancellor some room for manoeuvre when he\ndelivers his Budget and Spending Review in the Commons this afternoon.<\/p>\n<\/div>\n\n

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Pre-Budget\nannouncements<\/strong><\/p>\n<\/div>\n\n

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Perhaps unsurprisingly, the news agenda for\nthe last seven days also featured intense speculation about the Budget\u2019s likely\ncontent. In addition, much to the Commons Speaker\u2019s annoyance, there were also\nseveral pre-Budget briefings, including Treasury statements setting out\nspending plans for transport, health and education, details of an increase in\nthe National Living Wage to \u00a39.50 per hour and a lifting of the year-long\npublic sector pay freeze.<\/p>\n<\/div>\n\n

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Here to help<\/strong><\/p>\n<\/div>\n\n

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Financial advice is key, so please do not\nhesitate to get in contact with any questions or concerns you may have.<\/p>\n<\/div>\n\n

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The value of investments can go down as well\nas up and you may not get back the full amount you invested. The past is not a\nguide to future performance and past performance may not necessarily be\nrepeated.<\/strong><\/strong><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

 \u201cGrowth is being accompanied by an unprecedented rise in inflationary pressures\u201d A closely monitored survey, released last week, suggests the UK economy unexpectedly regained momentum during October. The preliminary reading of the IHS Markit\/CIPS Composite Purchasing Managers\u2019 Index (PMI) rose to 56.8, up from 54.9 in September. This represents the largest monthly increase since May […]<\/p>\n","protected":false},"author":15,"featured_media":2517,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[32,112],"tags":[],"hd_content_source":[],"_links":{"self":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/2516"}],"collection":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/comments?post=2516"}],"version-history":[{"count":2,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/2516\/revisions"}],"predecessor-version":[{"id":2519,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/posts\/2516\/revisions\/2519"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media\/2517"}],"wp:attachment":[{"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/media?parent=2516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/categories?post=2516"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/tags?post=2516"},{"taxonomy":"hd_content_source","embeddable":true,"href":"https:\/\/new.contentdeployment.co.uk\/tomd\/wp-json\/wp\/v2\/hd_content_source?post=2516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}