London ball

London gears up for a week of blockbuster business events

Chancellor Jeremy Hunt will deliver a fall statement (Stefan Rousseau/PA) (PA Wire)

It’s been a successful week for the economywith a series of watershed events that will help define the rest of 2022, such as Londoners prepare for a tough winter with a recession potentially already underway.

On Tuesday, we will know the impact of the slowdown on the works market and on average incomes. The number of people employed in the third quarter is expected to have fallen by 25,000, compared to a drop of 109,000 in the previous three months. That would leave the unemployment rate at 3.5%, a further sign of the resilience of the labor market as the recession is on the verge of becoming a full recession.

This could signal that the Bank of England has more leeway to raise interest rate faster without affecting employment levels and job creation. The Monetary Policy Committee will then meet on 16 December. Average earnings data is also released on Tuesday and is expected to rise to 5.5% excluding bonuses from 5.4% previously.

Big title inflation returns to the spotlight on Wednesday at 7 a.m. He was behind the cost of living crisis and economic downturn throughout the year, intensified by Russia’s invasion of Ukraine, which sent global prices of energy. The consumer price index (CPI) for October is expected to rise again by double digits, reaching 10.7% against 10.1% for September.

The Bank of England will be watching closely the size of its next rate hike and the likely peak it will need to reach to bring inflation under control and back towards its 2% target. It seems that the Monetary Policy Committee still has some way to go, which means more suffering for mortgage holders, as the cost of home loans increases accordingly,

Sanjay Raja, chief UK economist at Deutsche Bank, said: “Looking ahead, we continue to see inflation persistence. Although we expect price growth to slow more significantly from the second half of next year, we still expect the CPI to average 8.2% in 2023 before falling to 3 .4% YoY in 2024.”

There could be some hope from the producer price index, released at the same time, which is expected to rise from 20% to 18% year-on-year, leaving it at high levels , but at least in the right direction. .

The main event of the week takes place in Westminster on Thursday, with highly anticipated Fall statement on the country’s finances. He is going to play ChancellorJeremy Huntthe man who threw a wrecking ball at the short-lived government of Liz Truss and its “mini”-Budget, which caused a run on British financial assets and led Rishi Sunak to settle in Downing Street.

Hunt is expected to outline a range of measures – including both tax hikes and spending cuts – to plug a hole in public finances that is believed to have grown to around £60billion. He is set to restore the Office of Budget Accountability’s control over the plans, after it was stripped of its usual role last time around, one of the main reasons why previous plans lost the trust of the public. markets.

Attention will also turn to the government’s plans to cap energy prices for households and businesses, already scaled back to end in April from its originally planned duration of two years.

James Knightly, chief international economist at ING, the Dutch bank, said: “Our working assumption is that most households will be brought back to the regulated Ofgem price, which we believe will average £3,300 a year on the basis of current futures prices, down from £2,500 at the current government guaranteed level.

On the rest of the measures, he added: “Markets have generally given Britain’s new Prime Minister and his Chancellor the benefit of the doubt on next week’s Autumn Statement.”

The Chancellor has warned of sweeping tax hikes, telling the BBC that ‘everyone’ will pay more as the government seeks to show global investors it is taking a more sustainable approach to its finances after the chaos of the “mini”-Budget barely two months ago.