U.K.：Economic Calendar of This Week
2022-11-15
■ The UK economy is slowing down, but considering the special factors in September, I will pay attention to the economic trend after October.
■ The Sunac government's drastic tax and spending cuts, high prices, economic recession, the Bank of England policy implementation is exceptionally difficult.
U.K. real GDP fell 0.2% in the third quarter from a year earlier, the first negative growth since the first quarter of 2021. On a monthly basis, the economy grew 0.3% in July, fell 0.1% in August and 0.6% in September, with a growing sense of slowdown. The UK Statistics Authority noted that many businesses were closed in September for Queen Elizabeth's state funeral and that strikes had an impact on business activity, but this was the first significant negative growth since the city blockade was imposed in January 2021. Against the backdrop of rising prices and interest rate hikes, personal consumption is decelerating and the economy will be closely watched beyond October.
British Finance Minister Hunt said that to achieve long-term sustainable economic growth, there is no other way but to curb inflation, balance the budget and reduce debt. There are reports that the "medium-term fiscal plan" announced on the 17th will initiate tax increases and spending cuts, and that they are considering freezing public spending for three years after 2025 and reducing costs by about 27 billion pounds a year until 2028. On the other hand, it is reviewing its energy support measures for households and is beginning to consider the position of continued unlimited support.
Bank of England (BOE) Governor Bailey said on the 11th that it takes one and a half to two years to curb inflation, and the possibility of further increases in policy rates in the coming months is high. Supported a 25 basis point rate hike at the Monetary Policy Committee meeting on November 3. Bank of England policymaker Silvana Tenreyro believes policy rates will remain unchanged in 2023. However, he said that if the economy is to experience a severe recession, rate cuts would need to be brought forward to 2024 or 2023. Price and employment-related indicators will also be released this week, providing clues to forecast the direction of the Bank of England's policy. The market is welcoming to the Sunac government that values fiscal discipline, but it is also important to keep a close eye on the UK financial markets.