UK consumer confidence fell 11 points to −24 while the flash composite PMI hit an eight-month high of 53.1. Households and firms are bracing for Wednesday's Budget, and gilt dealers see fiscal headroom shrinking to £15bn.
CBI Economics says October’s year-on-year retail volume drop was the slowest in 18 months, with firms still expecting a similarly modest contraction in November ahead of the Budget. Source
Monday's UK data told three different stories, and one event sits behind most of the gap. Chancellor John Healey presents the Budget on Wednesday, and firms, households and bond investors are all positioning for it. Businesses say they are pausing spending. Households are building up savings. Gilt holders have told the Chancellor to do as little as possible.
