Blackfinch Spring VCT PLC has provided a weekly news update on global events. In the UK, Chancellor Jeremy Hunt delivered the Autumn Statement, announcing tax and spending plans to boost the struggling economy. The Office for Budget Responsibility (OBR) forecasted UK economic growth of 0.6% this year, an improvement from the previously expected 0.2%. However, growth in 2024 is expected to be weaker than previously forecasted at 0.7%. The OBR also predicted that headline inflation will fall to 2.8% by the end of 2024 and reach the 2% target in 2025. Prime Minister Rishi Sunak emphasized the need for careful and sustainable tax cuts. Bank of England Governor Andrew Bailey warned that it is too early to believe that the UK's inflation issues are resolved and to start discussing interest rate cuts. The government borrowed £14.9 billion in October, bringing the deficit to £98.3 billion in the financial year to October. Order books at UK factories fell to their lowest level since January 2021, according to data from the Confederation of British Industry. However, the UK private sector returned to growth in November, with the S&P Global/CIPS flash UK Purchasing Managers' Index (PMI) composite output index reaching 50.1. Energy regulator Ofgem announced a 5% increase in the household energy price cap for the January to March 2024 period.
In North America, minutes from the Federal Open Market Committee (FOMC) meeting showed that US Federal Reserve officials expected interest rates to remain high for "some time" in order to return inflation to its 2% target. The S&P Global Flash US PMI Composite Output Index was unchanged in November at 50.7, with services activity rising and manufacturing falling into contraction. Initial jobless claims dropped to 209,000 for the week to November 18th.
In Europe, updated data showed that Germany's gross domestic product (GDP) fell by 0.1% in the third quarter, matching the initial reading. German companies were slightly less pessimistic in November, with the IFO Business Climate Index rising to 87.3.
In global news, oil prices fell as OPEC+ announced a rescheduling of its production meeting to November 30th without providing a reason for the change.