14 Nov 2019
Farage turns down Tory offer
Overnight, the Daily Telegraph reported that the Conservatives had offered the Brexit Party an electoral pact, which has been turned down by leader Nigel Farage.
The paper claims that the proposal was that the Brexit Party contests just 40 key seats held by Labour, with the Conservatives in return carrying out only minimal campaigning in those areas. However, Mr Farage is reported to have pushed for the Conservatives to withdraw their ‘paper candidates’ for all 40 seats amid concerns that they would still attract votes and dampen the Brexit Party’s chances of success. Allegedly, talks between the two parties broke down late on Tuesday but they have until 4:00pm today before the deadline passes for candidates to submit their nomination forms. Sterling is relatively unchanged on the news.
Monthly figures for October showed the Chinese economy got off to a soft start to Q4, with all the main indicators showing a renewed slowing. In particular, industrial production growth was recorded at 4.7% (y/y), below the market consensus of 5.4% and reversing some of the surprise strengthening which was seen in September’s figures (5.8%). At the same time, investment and retail sales growth were also weaker than expected, the former slowing to 5.2% from 5.4% (consensus 5.4%) and the latter softening to 7.2% from 7.8% (consensus 7.8%).
Today’s figures will once again raise some questions over the health of the economy and comes just days after Premier Li stated that the authorities would take whatever measures were needed to ensure China’s key targets for 2019. Just to note it would take a significant slowdown in Q4 for China to miss the lower end of the its 6-6.5% 2019 growth target. Our forecast still remains 6.2% for 2019, but we do envisage a slowing to below 6% in 2020 (5.9%).
UK October CPI inflation softens
The targeted CPI inflation measure, released yesterday, moderated to 1.5% in October from 1.7% in September. That was below consensus expectations for a more moderate drop to 1.6%, but above our 1.4% forecast. The largest downward contribution (almost 0.2ppts) came from gas and electricity prices amidst the lowering of the Ofgem energy price cap. Furniture and household goods prices and recreation and culture prices were also downward influences. These were only partially offset by an upward effect from clothing and footwear prices which, contrary to reports of widespread discounting, factored in a 1.0% monthly rise. Given the strong negative contribution from utility prices, ‘core’ inflation did not see the same moderation and indeed held closer to the Bank of England’s 2% goal at 1.7%, unchanged on September’s reading.
UK 09.30 Retail Sales
EU 10.00 GDP
US 13.30 PPI
US 13.30 Decision expected on auto tariffs