Closing post
Time for a recap…
UK factories staged a recovery in October after the reopening of Jaguar Land Rover operations and a pick-up in consumer spending, according to a closely watched survey of the manufacturing sector.
The S&P Global purchasing managers’ index (PMI) rose to a one-year high as business optimism improved and factory output expanded.
Jaguar Land Rover, Britain’s biggest carmaker, supported the recovery after it began reopening facilities hit by a cyber-attack that some experts estimated cost the UK economy about £1.9bn.
US factories, meanwhile, reported that tariffs weighed on their exports, and also led to another steep rise in input prices. Stocks of finished goods also jumped, suggesting weakening demand.
The world’s biggest oil producers have agreed to pause their planned oil production hikes in the first months of next year to assuage fears that the global market may become oversupplied with crude.
The Opec+ group agreed yesterday to nudge the cartel’s exports up by 137,000 barrels a day in December, before halting any further rises in January, February and March.
The oil price rose in response, but has since dipped back, with Brent crude now down 0.3% at $64.59 per barrel.
In deals news….
Consumer goods maker Kimberly-Clark has agreed to buy Tylenol owner Kenvue for $48.7bn.
OpenAI has signed a seven-year, $38bn deal to buy cloud services from Amazon.com.
Updated
US manufacturing hit by tariffs and shutdown gloom
US tariffs have hit sales abroad last month, and pushed up costs, a new survey shows.
The latest poll of purchasing managers across the US manufacturing industry has found that new exports fell last month, indicating that tariffs hurt international trade.
Tariffs also continued to underpin a steep level of cost inflation in the manufacturing economy, data provider S&P Global reports.
More broadly, the report shows that output and new orders rose at a stronger rate last month, as the US manufacturing economy improved .
But, Chris Williamson, chief business economist at S&P Global Market Intelligence, warns that the underlying picture is “not so healthy”, adding:
“Most worrying is the unprecedented rise in unsold stock reported in October, widely linked to weaker than anticipated sales to customers, especially in export markets, which could trigger a downshifting of production in the coming months unless demand revives.
Companies have also become less optimistic about the year ahead, with sentiment back down close to the gloomy levels seen around the April tariff announcements. US trade policy uncertainties are again a big factor in dampening business spirits, with tariff policies being increasingly blamed both on rising export losses and import supply chain disruptions.
These export and import worries are being exacerbated by more domestically focused political concerns, including the federal shutdown, which are manifesting themselves most prominently in consumer-focused industries.
Business confidence among producers of consumer goods is now down to its lowest for two years as firms growing increasingly worried about household spending in the US and falling sales to consumers in export markets.”
Updated
Amazon’s stock is jumping (+5%) after OpenAI signed a $38bn deal to access its Amazon Web Services.
The deal will give OpenAI access to more computing power, allowing it to run products such as ChatGPT on AWS infrastructure.
Until now, OpenAI has been more closely tied with Microsoft (one of its investors), and its Azure cloud systems.
Updated
Nasdaq opens higher
Wall Street has begun the new week with fresh gains among technology stocks.
The Nasdaq index has risen by 164 points, or 0.69%, to 23,889 in early trading.
Pet healthcare firm IDEXX (+14%) is top dog after reporting strong financial results, with Amazon (+4.9%), Nvidia (+2.7%) and Tesla (+2.3%) also among the top risers.
This adds to strong gains already this year, as Tom Stevenson, investment director at Fidelity International, reports:
“With October closing out at the end of last week, US stocks have now hit their longest monthly winning streak in four years. The S&P 500 added 2.4% in October, enough to register a sixth consecutive month of gains. It has hit an all-time high on 36 occasions so far this year.
“The tech-heavy Nasdaq did even better. It rose 4.8% in October to notch up a seventh straight monthly improvement. That is its longest run since 2018.
“It has been a remarkable year for equity investors because outside the US, returns have been even higher, between 20% and the mid 30% range for Europe, Japan, and emerging markets. Only gold has done better.”
China’s foreign minister has held phone talks with his German counterpart, Beijing’s ministry of foreign affairs has said.
The call, with German foreign minister Johann Wadephul, covered security, economic policy and other topics of mutual interest, a foreign ministry spokesperson said in Berlin on Monday.
The ministers agreed that a trip by Wadephul to China that was recently cancelled should be rescheduled soon, the spokesperson said, adding that the Chinese side also reiterated its invitation to German Chancellor Friedrich Merz.
The talks come amid increasing concern in Germany that car manufacturer are being held to ransom by China which is restricting exports of chips and rare earths including magnets needed to open car windows and books.
The issue of Taiwan independence was raised by the Chinese foreign minister Wang Yi who said he hoped the Germany would oppose the country’s independence.
China’s foreign ministry said:
“China unconditionally supported German reunification and hopes that Germany, having experienced the pain of division, can fully understand and support China in safeguarding its national sovereignty and territorial integrity and opposing all acts of ‘Taiwan independence’”.
Soybean prices have hit a 15-month high today, on hopes that China will resume buying supplies from the US.
Chicago soybeans rose to their highest since July 2024, after the US and China reached a deal to de-escalate their trade war.
Reuters reports that the Chicago Board of Trade most-active soybean contract rose 0.5% to $11.21-1/4 a bushel this morning. Wheat and corn prices also rose.
Vast launches commercial space station pathfinder 'Haven Demo'
California company Vast Space has taken an important step towards launching the world’s first commercial space station.
On Sunday, Vast deployed a satellite into orbit which will test a range of critical space station systems.
The satellite, called Haven Demo, was launched on a SpaceX Falcon 9 rocket. It will provide important information on radiation tolerant computers, power systems, software, sensors, reaction control systems, propulsion, radios, ground stations, and command and control systems, Vast say.
It will help Vast develop Haven-1, the world’s first commercial space station, which is scheduled to launch in 2026.
Announcing the deployment, Vast says:
Haven Demo achieved mission success after deploying from SpaceX’s Bandwagon-4 flight on Nov 2, 2025. Following nominal separation and stable sun-pointing, the spacecraft captured 4K video of its solar array deployment and is power-positive.
Vast was founded by billionaire entrepreneur Jed McCaleb, who developed the Ripple cryptocurrency protocol.
Haven demo successfully deploying solar array. Very proud of this team! @vast pic.twitter.com/ORq9hQE5fB
— Jed McCaleb (@JedMcCaleb) November 2, 2025
Speaking to the Guardian back in January, Vast’s CEO Max Haot said the company believes that, eventually, more people will be living in space than on Earth (although we probably won’t live to see this).
Haot explained:
We have a long term vision that we want to be the leading builder and operator of a space station. In our long term roadmap, which was set by our founder in 2021, we want to be the first company that create an artificial gravity space station, leveraging the new SpaceX rocket – Starship - and build a 105 metre long stick in space by seven metres in diameter.
And if we rotate it at four rotation per minute, we will have 1g gravity, on either end, so the same as the Earth and zero G in the center.
That gravity provision would protect astronauts from the physical damage of living in an exclusively zero-gravity environment for months.
Updated
EU states to report impact of Nexperia chip crisis
EU member states have until Friday to report back on the impact of the chip supply crisis caused by a Chinese ban on exports by Nexperia following the controversial takeover of its Netherlands factory by the Dutch government last month.
The move comes as the EU failed to strike a breakthrough during talks between the bloc’s tech commissioner Henna Virkkunen and Nexperia’s interim boss in the Netherlands on Friday.
They were meeting as part of urgent efforts to prevent German, French, Italian, Spanish and Swedish car companies running out of supplies following stark warnings last week they had just “days” left before they would have to halt production.
Separately senior EU officials met with their Chinese counterparts in Brussels on Friday to ease supplies of rare earths which are still strongly restricted by Beijing since export controls were imposed in April.
EU trade spokesperson Olof Gill said on Monday that “engagement” continued to try and “ensure a safe supply of chips” and a “swift and effective solution: on rare earths.
EU ambassadors will be briefed on Wednesday on the outcome of meetings on Friday.
Kimberly-Clark to buy Tylenol-maker Kenvue in $48bn deal
A major acquisition has just been announced in the US consumer goods sector.
Kimberly-Clark, the firm behind Kleenex and Andrex, has agreed to buy consumer health rival Kenvue in a $48.7bn deal.
The deal will, apparently, bring together “10 iconic billion-dollar brands, that will provide preferred solutions through every stage of life”.
Mike Hsu, Kimberly-Clark chairman and chief executive officer, says:
“We are excited to bring together two iconic companies to create a global health and wellness leader.
“Kenvue is uniquely positioned at the intersection of CPG (consumer packaged goods) and healthcare, with exceptional talent and a differentiated brand offering serving attractive consumer health categories. With a shared commitment to developing science and technology to provide extraordinary care, we will serve billions of consumers across every stage of life.
Kenvue’s brands include pain medication Tylenol, which Donald Trump’s administration has claimed pregnant women should avoid, claiming it was linke to a rise in autism among children. Those claims were criticised as highly concerning and irresponsible by medical experts.
Another multi-billion artificial intelligence deal has been announced.
Microsoft has signed a $9.7bn deal to purchase AI cloud capacity from Australian company IREN, becoming the cloud computing company’s largest customer.
The five-year agreement will give Microsoft access to high-powered data centres in Texas built using Nvidia’s GB300 chips, with the software giant agreeing to a 20% prepayment.
Sydney-based IREN also said it will commit $5.8bn of capital expenditure to purchase the requisite GPUs and related equipment – from Dell, according to Bloomberg.
Exports of Irish goods to the US have fallen from around €14bn a month to just €4bn a month after firms including whiskey and pharma producers rushed to beat Donald Trump’s tariffs earlier this year, the country’s deputy prime minister has said.
Simon Harris is meeting industry and agriculture chiefs on Monday as part of an ongoing dialogue aimed at mitigating the 15% tariff now imposed on imports to the US, hitting some of the country’s biggest brands including Kerrygold and Jameson Whiskey.
The 15% tariff negotiated on exports by the EU with Trump this summer was “an mportant shield” for Irish exporters, he said, but economic data had yet to show the consequences.
Speaking ahead of the meeting, Harris said:
“The data has shown, however, the defining feature of the Irish economic developments this year has been the substantial increase in exports to the US in advance of the anticipated introduction of tariffs.
“Goods exports to the US averaged just €4 billion per month between June and August, compared to €14 billion per month in the first five months of the year. We will continue to monitor this in the months ahead.”
The price of Nigeria’s government debt has fallen today, after US president Donald Trump threatened military action in the country if it did not take action to protect Christians.
Longer-dated bonds fell the most, Reuters reports, with the 2051 issue falling roughly 0.5 cents, to bid at just under 92 cents on the dollar, in contrast with flat trading for most emerging market bonds.
Trump said on Saturday he had ordered the Pentagon to begin planning for potential military action in Nigeria as he stepped up his criticism that the government was failing to rein in the persecution of Christians in the west African country.
The recovery in UK manufacturing remains “fragile”, despite the boost from the JLR restart, says Mike Thornton, head of industrials at consultancy RSM UK.
“While the uptick in manufacturing activity in October shows a reverse on the downward trend seen in August and September, only time will tell if this is a temporary rebound in output rather than a sustained recovery. Following Jaguar Land Rover’s phased production restart in October, it’s likely that this has created a ripple effect throughout the supply chain, particularly as the shutdown impacted over 5,000 middle market businesses.
“The impact of the restart will also likely be reflected in the increase to new orders, employment and output indices, as businesses look to address backlogs of work. However, there are wider signs of domestic improvement, with input prices dropping to their lowest level since December 2024, suggesting inflationary pressures are easing. This has offered some relief to manufacturers following months of price pressure.”
UK factories return to growth after JLR restarts operations after cyber-attack
UK manufacturing output has expanded for the first time in a year, helped by the restart of production at Jaguar Land Rover following its recent cyberhack.
The latest poll of purchasing managers at UK factories, just released by S&P Global, shows that manufacturing output rose for the first time in a year in October.
S&P Global reports that production volumes rose in the consumer and intermediate goods industries, partly due to a boost from the staged restarting of production at JLR last month.
This helped to lift the wider UK Manufacturing Purchasing Managers’ Index to a 12-month high of 49.7 in October, up from 46.2 in September, showing a smaller drop in overall activity.
Rob Dobson, director at S&P Global Market Intelligence, explains:
“The October PMI survey shows UK manufacturing production rising for the first time in a year, which is a positive in itself. However, there are real concerns that the bounce could prove short-lived.
Not only did October see auto sector supply chains benefit from the production restart at JLR, which will provide only a temporary spike in production, but sluggish demand from both domestic and overseas markets meant October’s output growth was dependent on firms eating into backlogs of orders placed in prior months and allowing unsold stock to accumulate.
JLR began a phased restart of operations in early October, after a crippling cyber-attack forced a month-long shutdown, which pushed UK car production down to a 73-year low.
Dobson adds that budget worries are weighing on factory bosses:
“There are also concerns the forthcoming Budget will exacerbate the lingering challenges created by last year’s Budget, especially in relation the impact of NMW and employer NICs on costs, demand and production.
This means that business optimism remains below its long-run average despite rising to an eight-month high in October. Manufacturers seem to be stuck in a holding pattern until the domestic policy and geopolitical backdrops exhibit greater clarity.
The eurozone’s manufacturing sector stagnated last month, new dat shows, as factories were hit by weak demand.
The HCOB eurozone manufacturing PMI, which tracks activity in the factory sector, has come in at 50.0 – a level showing stagnation.
That’s a marginal improvement on September’s 49.8, which signalled a small contration.
Manufacturing conditions were the strongest in the south of the eurozone during October, data provider S&P Global reports, adding:
Greece and Spain saw the strongest improvements, with respective index readings ticking up on the month.
The Netherlands – September’s top performer – saw its expansion slow to a four-month low and growth in Ireland also lost momentum.
Contractions continued in Germany, France and Austria, although rates of decline lost momentum in all three instances. Italian manufacturing conditions were broadly unchanged.
Bank of England expected to hold interest rates this week
The big event of the week, for the UK markets anyway, will probably be the Bank of England’s interest rate decision on Thursday.
The money markets suggest there is a 30% chance of a rate cut, but most City economists expect no change from the BoE.
James Smith, developed markets economist, UK at ING, explains:
The Bank looks likely to keep rates on hold on 6 November, despite better inflation and wage news. The committee is deeply divided, and we don’t expect clear signals on the Bank’s next steps. But assuming the Autumn Budget goes as expected, a December rate cut now looks more likely than not.
Kathleen Brooks, research director at XTB, argues that a surprise cut cannot be ruled out, given the recent spate of weak economic data, adding:
Inflation remains at 3.8%, still unacceptably high for the BOE, in our view. However, crucially, the BOE expected inflation to peak in September at 4%. It will be interesting to see if the BOE downgrades its CPI forecast due to this, since inflation never reached its peak of 4%.
Will the Bank instead say that price growth will moderate from here and reach the target 2% rate before 2027? If yes, then this could give the green light for a rate cut in February. If the BOE does err on the dovish side without cutting rates this week, then the downside for the pound could be limited, due to recent weakness in sterling and the sharp decline in UK Gilt yields.
Simon French, chief economist at Panmure Gordon, says Bank’s Monetary Policy Committee (MPC) will want to see Rachel Reeves’s budget later this month, before deciding to ease monetary policy:
Inflation expectations amongst businesses and households remain elevated. The price level outlook heading into next year will hinge, in large part, on Budget decisions on 26 November.
The option cost for the MPC of waiting to their December meeting - and a degree of fiscal clarity that will then be available - is low. The prize for the UK government of translating its encouraging talk on controlling inflation into Budget action is a path to up to 100bp of UK interest rate cuts in 2026, and a potential cyclical upswing.
We remain unconvinced - and we suspect so do most of the MPC - that this Cabinet will resist the temptation to take well-meaning tax and regulatory actions that fuel further UK price rises.
Updated
Shares in Italian drinks maker Campari have fallen almost 3% tthis morning after Italian tax police seized €1.29bn worth of shares in the company, held by its controlling shareholder, following a tax evasion investigation.
On Friday police said they were seizing Campari shares held by its controlling company Lagfin after a probe found €5.3bn of allegedly undeclared capital gains.
Prosecutors claim Lagfin failed to pay a tax levied on firms that transfer their fiscal residence abroad, after it absorbed an Italian subsidiary that held Campari’s controlling stake.
Prosecutors say the reorganization effectively shifted the group’s management and tax base overseas, triggering the disputed liability.
Lagfin denied any wrongdoing.
Student accommodation provider Empiric has reported a drop in bookings from students from China.
Empiric Student Property, which is currently being taken over by rival Unite Group, told shareholders this morning that its occupancy levels have dropped to 89% at the start of this academic year, compared with 95% in October 2024.
Unless current conditions change, delivering the company’s occupancy target for this academic year will be “challenging”, it says.
Duncan Garrood, chief executive officer of Empiric, explains:
“The booking cycle for academic year 2025/26 has seen an increase in reservations from UK students and a reduction in the number of Chinese students staying with us, potentially the result of geopolitical events.
Rental growth remains in line with guidance and we are well positioned for January sales activity. All the while, we have continued to improve the quality of the portfolio whilst delivering on capital deployment commitments.”
Updated
The UK stock market has started the new week slightly stronger, with the FTSE 100 index up 12 points or 0.13% at 9730 points.
Legal & General (+1.4%) and Standard Chartered (+1.6%) are leading the risers, along with BP (now +1.5%).
Shares in oil giants are rising in early trading in London, after Opec+ paused its plans to hike output in the early months of 2026.
BP are among the top risers on the FTSE 100 share index, up 1.75%, after announcing the sale of its non-controlling stakes in the Permian and Eagle Ford midstream assets of its U.S. onshore oil and gas business for $1.5bn.
Shell’s shares are up 1%, supported by target price upgrades from Berenberg and Citigroup this morning.
The United Arab Emirates’ energy minister has predicted that growth in AI data centres will lift oil demand in 2026.
Asked about the possibility of an oil glut in 2026, at the ADIPEC energy conference in Abu Dhabi, Suhail al-Mazrouei repled:
“I think all of what we are seeing is more demand.”
Mazrouei pointed out that energy investments are needed because artificial intelligence and data centres require more power, pointing out (via Reuters):
“There is a requirement for more energy ... and we need to make sure the environment for investment is allowed to do that.
“If we’re not achieving a balance between the price and what you would require, we will not have (a sufficient flow of investment) to do it.”
Updated
October was another strong month for markets, thanks to the US-China trade truce, strong economic data and decent earnings releases.
Those positive factors outweighed concerns around private credit and fears of a potential AI bubble, explain Deutsche Bank’ analysts Henry Allen and Jim Reid.
They point out that the S&P 500 share index posted a 6th consecutive monthly gain for the first time since 2021, adding:
Meanwhile in Japan, the Nikkei had its strongest month since October 1990 as the new government led by Sanae Takaichi came to office.
In fixed income, sovereign bonds advanced despite the Fed’s hawkishness towards month end, with the 10yr Treasury yield (-7.3bps) seeing its lowest monthly close in over a year, at 4.08%.
And finally, precious metals had another good month, with gold moving above $4,000/oz for the first time, whilst silver posted a 6th consecutive monthly gain for the first time since 1980.
Asia-Pacific stock markets are climbing this morning, amid ongoing relief over the US-China trade deal agreed last week.
China’s CSI 300 index has gained 0.3%, while the Hong Kong Hang Seng index is up 1%, and South Korea’s KOSPI 200 has surged 3.4%.
The White House released a fact sheet on Saturday with more details about the trade agreement which was agreed between President Trump and China’s President Xi Jinping in South Korea.
It says China has agreed to:
Halt the flow of precursors used to make fentanyl into the United States.
Effectively eliminate China’s current and proposed export controls on rare earth elements and other critical minerals.
End Chinese retaliation against U.S. semiconductor manufacturers and other major U.S. companies.
Open China’s market to U.S. soybeans and other agricultural exports.
Tax rises and drop in investment predicted to limit UK growth
The prospect of looming tax rises and a fall in business investment will restrict the UK’s economic growth rate next year to less than 1%, according to a health check of the economy by a leading consultancy this morning.
With less than four weeks before Rachel Reeves delivers her budget on 26 November, the EY Item Club has downgraded Britain’s growth for next year, indicating that the economy will continue to expand at a sluggish pace, limiting tax receipts and the chancellor’s financial room for manoeuvre.
Morgan Stanley raises oil price forecast after OPEC+ pauses output hikes
Morgan Stanley has raised its near-term forecast for crude oil prices following OPEC+’s decision to pause production hikes.
The Wall Street bank said on Monday it was lifting its Brent estimate to $60 a barrel for the first half of 2026, up from $57.50, Bloomberg reports, after Opec and its allies said yesterday they plan to halt output increases in the first quarter of next year.
Morgan Stanley analysts explained:
“Even if the OPEC announcement does not change the mechanics of our production outlook, it does send an important signal.
“With OPEC involvement, volatility is reduced.”
Updated
Introduction: Opec+ to pause oil output rises next year
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is rising after the world’s biggest oil producers agreed to pause their planned oil production hikes in the first months of next year, to assuage fears that the global market may become oversupplied with crude.
At a meeting of the Organization of Petroleum Exporting Countries (Opec) and its allies on Sunday, led by Saudi Arabia and Russia, energy ministers agreed to nudge the cartel’s exports up by 137,000 barrels a day in December, before halting any further rises in January, February and March.
The decision marks a change of policy from the eight-strong group which has increased its production quota by almost 3m barrels of crude a day over the past year. The group has opted to slow its growth in recent months to avoid a collapse in oil prices amid growing concerns of a market oversupply.
“OPEC+ is blinking — but it’s a calculated blink,” said Jorge Leon from Rystad, adding:
“Sanctions on Russian producers have injected a new layer of uncertainty into supply forecasts, and the group knows that overproducing now could backfire later.”
This morning, Brent crude has gained 0.75% to $65.25 per barrel, with US crude up a similar amount to $61.44 per barrel.
Oil prices fell to a five-month low of about $60 a barrel on 20 October on concerns that a glut was building in the market - but prices then recovered following a raft of sanctions against Russian oil barrels and a thawing of trade relations between the US and China.
The agenda
9am GMT: Eurozone manufacturing PMI for October
9.30am GMT: UK manufacturing PMI for October
9.30am GMT: UK public sector productivity statistics
2.45pm GMT: US manufacturing PMI for October
