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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (until 2.15) and Nick Fletcher

UK faces new £20bn budget black hole –as it happened

Britain’s Finance Secretary Philip Hammond uses a microscope to examine protein crystals during his visit to The Francis Crick Institute in London last week.
Britain’s Finance Secretary Philip Hammond uses a microscope to examine protein crystals during his visit to The Francis Crick Institute in London last week. Photograph: POOL/Reuters

European markets end mixed

In an uncertain day ahead of a busy week, the Spanish stock market bucked the trend and jumped sharply on hopes that the Catalan independence crisis could be resolved. A positive set of GDP numbers for the country also helped sentiment.

Elswhere the FTSE 100 slipped lower, as its overseas earners reacted badly to a stronger pound, which moved higher ahead of this week’s Bank of England meeting where the first interest rise in a decade is widely expected.

On Wall Street the latest developments in the investigation into possible Russian interference in the US election saw markets slip back. There was also talk that President Trump’s long awaited tax reforms may only be gradual. The final scores in Europe showed:

  • The FTSE 100 finished down 17.22 points or 0.23% at 7487.81
  • Germany’s Dax edged up 0.09% to 13,229.57
  • France’s Cac closed 0.01% lower at 5493.63
  • Italy’s FTSE MIB rose 0.39% to 22,752.89
  • Spain’s Ibex ended up 2.44% at 10,446.0
  • In Greece, the Athens market added 0.59% to 743.57

On Wall Street, the Dow Jones Industrial Average is currently down 63 points or 0.27%.

On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow.

On Wall Street, the Dow Jones Industrial Average and S&P 500 continue to suffer, not helped by talk that the much anticipated Trump tax reforms could now only be gradual.

So the Dow and the S&P 500 are both down around 0.3%. But the Nasdaq Composite has slipped just 0.1% as investors still like the look of technology stocks in the wake of last week’s bumper results. Apple and Facebook, which both give updates this week, are both in demand.

The pound has moved higher ahead of the Bank of England’s latest meeting this week, with the first interest rate rise for a decade widely expected.

Sterling is currently up 0.49% against the dollar at $1.3190 and 0.32% higher against the euro at €1.1341. The strength of the pound has however knocked 0.25% off the FTSE 100, dominated as it is by overseas earners who benefit from a weaker UK currency. Connor Campbell, financial analyst at Spreadex, said:

Sterling continued to strengthen on Monday, as investors spent a relatively quiet afternoon eyeing Thursday’s Bank of England rate vote...Though an interest rate rise on Thursday is far from certain, today’s trading seems to suggest investors think we might be in for the first hike in a decade.

A UK rate rise is widely deemed to be good for the country’s banks but Peter Thorne, senior financial analyst at Charles Stanley, is not convinced:

Rock-bottom interest rates have been terrible for UK banks’ profitability, but any interest rate rise ...could actually be a double-edged sword. Higher interest rates will boost UK banks’ net interest income but the equity market is increasingly concerned about the slowdown in the UK economy and the negative effects it could have on loan growth and bad debt charges which a rate rise might worsen.

Back with the UK public finances, and Labour MP Stella Creasy has found a tax loophole she believes could bring in some £8bn to the public purse. She writes:

There is a country that taxes British residents, and British companies, when they make money on selling commercial real estate, but doesn’t tax foreigners. That country is the UK. Closing the tax loophole around non-UK companies and commercial property sales would level the playing field for British businesses and at the same time help tackle the overheated housing market. It would also generate substantial revenue – enough to cover the entire public health budget for a year, for example.

According to the British Property Federation there is about £871bn worth of commercial real estate in the UK – 10% of our nation’s net wealth. Not only is this hugely important in its own right, its value impacts on the price of land, and hence of new homes. About 20% of commercial real estate is sold each year – worth an eye-watering £115bn in 2015, according to Her Majesty’s Revenue and Customs.

When a seller is a UK individual or company, they are subject to UK corporation tax on their capital gains. Yet where the seller is foreign they are not. Approximately one-third of all UK commercial real estate – including most high value property – is held through offshore companies. Typically these companies are in tax havens, or structured so they pay no tax on the capital gain. Indeed, British taxpayers should be asking tough questions as to why their government turns a blind eye to anyone who holds UK property in offshore companies.

Her full analysis is here:

Updated

Here are some of the comments from the Dallas manufacturing survey:

Chemical Manufacturing

  • Our input for October is impacted by hurricane effects on the Gulf Coast—month/month improvements were driven by industrial shutdowns and a prolonged recovery effort.
  • We are having huge problems getting raw materials following Hurricane Harvey. We could not get deliveries due to a lack of drivers when the material was available. These problems are continuing.

Fabricated Metal Product Manufacturing

  • The shutdowns and damage as a result of Hurricane Harvey and to a lesser extent Hurricane Irma have caused refinery operators to reschedule a lot of their planned work into 2018. This delay is having an increased effect on pricing pressure for what work is available, and the small amount of project work is almost entirely being sourced offshore. We are planning on an extended period of extremely poor market conditions and are adjusting our capacity accordingly.
  • Our facilities were severely flooded in Hurricane Harvey, so we had little production in September and are still in the process of repairing major production equipment.
  • The global economies and the U.S. economy are very weak and uncertain—poor environment, business, etc.
  • We saw a lull in orders in the third quarter and some into the fourth due to hurricane activity along the Southwest and Southeast. However, this short-term lull is due only to weather and will pick up in the fourth quarter and first quarter of 2018.

Nonmetallic Mineral Product Manufacturing

  • Public infrastructure spending drives the revenue cycle for our business. We need a long-term federal highway bill.
  • We are seeing the effects of Hurricane Harvey on the activities of our customers.

Machinery Manufacturing

  • We remain optimistic about the future, although things have slowed down significantly.

Computer and Electronic Product Manufacturing

  • The world economy and high dollar have been a problem for our customers in the capital equipment industry.

Electrical Equipment, Appliance and Component Manufacturing

  • Things are generally good—not great. Hurricanes slowed down September and October, which are usually two of our best months. Competitors are pricing erratically, which is hurting profits.

Printing and Related Support Activities

  • The rebound from Hurricane Harvey’s impact on Houston business is still dragging. Some clients did not make it through and closed. Insurance companies are dragging out compensation on claims and slowing the recovery. Our mail volume from hundreds of customers is still down, and we are hoping that they will finally get their businesses repaired and begin to market their services again because the holiday season is upon us, and everyone knows they have to make it now or things will implode.
  • We keep waiting for it to get busier, although we are very busy now, which is normal for this time of year. I see November and December possibly being slower than normal, which is concerning as we use the fat from these months to carry us through the lean winter months.

Beverage and Tobacco Product Manufacturing

  • October is looking better than September, which was weak. The two months will probably net out to about flat compared with the prior year. We have at least made up our first-half decline and are now up 0.2 percent year to date. This is a slight improvement from the 1 to 2 percent annual declines we have experienced the last few years.

Apparel Manufacturing

  • Military apparel sewing projects are anticipated to increase significantly.

Paper Manufacturing

  • September and October were good months.

More positive economic data from the US, more fuel to the flames as far as a December rate hike is concerned.

The Dallas Federal Reserve manufacturing index of general business activity came in at 27.6 in October, much higher than the expected 21 and September’s figure of 21.3.

The manufacturing output index rose from 19.5 in September to 25.6.

texaxmanu

Wall Street falls back but Spain regains ground

US markets have eased back from their record breaking run last week, which was partly fuelled by a surge in technology shares after forecast-beating results from the likes of Amazon and Microsoft.

As well as some profit taking, investors are playing it cautiously ahead of the latest US Federal Reserve meeting this week - which is not expected to alter interest rates but could point to a rise in December - and crucially, Donald Trump’s decision as to who he will pick for the next Fed chair.

On top of that, traders are also trying to weigh up the latest developments in the enquiry into possible Russian interference in the US election.

So the Dow Jones Industrial Average is currently down 37 points or 0.16%, while the S&P 500 and Nasdaq Composite both opened a few points lower.

Over in Europe, and the Spanish market has jumped 2.4%, recovering all of Friday’s losses and more despite the continuing dispute over Catalonian independence. Some concerns were eased a little after a weekend poll suggested secessionists may lose their majority in elections scheduled for December. David Madden, market analyst at CMC Markets UK, said:

The Spanish government has dissolved the parliament in Catalonia, and has announced a snap election in December. According to the opinion poll that was published in El Mundo, the Catalan separatists might lose their majority in the region.

On top of that, came some positive Spanish GDP figures as we reported earlier.

So all in all, the MSCI world equity index hit yet another new peak, up 0.2%.

Updated

Brace yourself for some spooky charts....

The IFS’s warning that Britain’s fiscal position is worse than forecast has cast some autumnal gloom over the economy.

And with Halloween looming, Anthony Doyle, fixed interest investment director at M&G, has send over some more spooky charts to give us the shivers.

This one shows how the G20 advanced economies now owe $135 trillion US dollars, or 260% of their annual economic outlook.

As Doyle says:

Governments, corporates, and households have never lived beyond their means by so much.

The global debt mountain

This chart shows how the European Central Bank’s huge asset purchase scheme has driven down the interest rate on eurozone government debt. So, what happens when the ECB stops buying?....

ECB's debt purchases

With interest rates so low, and central banks so active in the market, investors have been forced to buy riskier assets in search of a decent return.

So if the markets turn south and investors “head for the exits”, there could be “substantial price declines” if everyone tries to sell these assets at the same time.

The boom in risky assets

After decades of weakened unions, workers now face poor wage growth and limited job protection.

Indeed, the situation is so bad that central bankers are now calling for wage increases.

Doyle says:

For the first time, central bankers like Mario Draghi and Haruhiko Kuroda have been calling on unions to increase wage demands, with Draghi stating wages are the “primary driver of inflation”.....

Unless workers can start demanding higher rates of pay, it is likely they will continue to suffer real-wage declines. This has been the case in the UK, with unit labour costs and inflation growing by 16% and 25% respectively since 2008.”

.

And finally, a chart showing why ‘hard Brexit’ could be scarier than the costumed children who’ll be knocking on our doors tomorrow night:

UK trade

Doyle explains:

“In March 2019, unless some form of deal is agreed, the UK will have to negotiate trade deals with the majority of its current trading partners. This would be a major challenge as complex trade agreements are not easy to negotiate and often take years to agree to.

If the UK finds itself outside the European Union Single market and the EU Customs Union, tariff and non-tariff trade barriers (like quotas, embargoes, and levies) are likely to be implemented between the UK and its main European trading partners. Some sectors and companies may face much more restricted access to the European market, and that will prove to be a significant headwind to UK economic growth in the short-term.”

The German flag.
The German flag.

Just in: The cost of living in Germany rose by less than expected this month.

Germany’s harmonised consumer prices index rose by 1.5% per year in October, a smaller rise than expected.

The European Central Bank will see this as vindication for its strategy of keeping interest rates at record lows (even though it’s very unpopular with German savers).

US consumer spending jumps

Newsflash from America: US consumer spending has surged at its fastest rate since the early days of the financial crisis.

Consumer spending jumped by 1% in August, a very sharp increase. It may be driven by people replacing furniture and automobiles damaged by the hurricane season.

This is the biggest jump since summer 2009, when US launched a ‘cash for clunkers’ scrappage scheme to encourage people to buy new cars.

Goldman CEO: Hope we can fill our London HQ....

Lloyd Blankfein, the CEO of Goldman Sachs, has a new hobby -- baiting the UK government over its Brexit strategy.

Blankein has just tweeted a photo of Goldman’s new European headquarters, currently being built in the City of London.

Jolly impressive it looks too.... but Blankein hints that Goldman might not fill the site, if it is forced to relocate staff overseas because of Brexit.

This is Blankfein’s second pointed tweet of the month. Two weeks ago, he couldn’t resist telling his 66,000 followers how much he loves Germany’s financial capital, Frankfurt.

For balance, we should note that the weather in London is rather splendid today....

A trader’s screens at CMC Markets in London.
A trader’s screens at CMC Markets in London.

Over in the City, sterling has risen this morning despite the IFS’s gloomy prognosis.

The pound has gained over half a cent against the US dollar to $1.318, largely driven by expectations that the Bank of England will raise interest rates from 0.25% to 0.5% on Thursday.

It could be a split decision; some BoE policymakers, including deputy governor Jon Cunliffe and Dave Ramsden, have sounded a little nervous about a rate hike recently.

But the BoE, led by governor Mark Carney, has dropped a lot of hints that a rate hike is coming.... so it would be real shock if it doesn’t happen.

Kallum Pickering of German bank Berenberg explains:

When it comes to monetary policy, talk matters almost as much as action. Now that the market is ready and waiting for a hike this week, the BoE would risk a major hit to its credibility if it did not meet this expectation. In short, if the BoE didn’t intend to hike it probably would have told us by now.

Updated

If you’re just tuning in, here’s the key message from the IFS today :

As you can see, Britain is probably going to have to borrow more than expected over the next few years, and a lot more if the Office for Budget Responsibility concludes that UK productivity growth will remain ‘very weak’ in the next few years.

Back in London, the Institute of Fiscal Studies is briefing experts about its new assessment of the UK economy, ahead of next month’s budget.

Helen Miller, the head of tax research at the IFS, is tweeting some key charts.

They show how Philip Hammond is in a real fix if, as seems likely, Britain’s weak productivity growth drives up Britain’s deficit by £20bn by 2020-21.

This one, for example, highlights how health spending has been pretty modest since the financial crisis, once you adjust for population changes.

This chart shows how government is already planning further public spending cuts over this parliament.....

....while Britain’s environment department has suffered the biggest spending cuts since 2010.

The Justice department has also been squeezed - and there are now signs that this is causing real damage:

But where could Hammond raise money from? He could increase national insurance, or abandon cuts to corporation tax. But would the House of Commons approve?....

Breaking: Economic confidence across the eurozone has hit its highest level in around 16 years.

Following Spain’s decent growth figures this morning, it’s fresh evidence that 2017 is turning into a vintage year for the eurozone. The lack of a debt crisis is helping the region to catch up with Britain, just as the UK economy slows....

Bank of England: Consumer credit growth strong, but mortgage approvals fall

Newsflash: British consumers are still racking up bills on their credit cards.

New figures from the Bank of England shows that borrowing via credit cards jumped by by 9.3% year-on-year last month. Britons now owe £69.4bn on their credit cards, up from £69.0bn in August.

This may be a sign that rising inflation, and falling real wages, is forcing more people to borrow to make ends meet.

In total, all consumer credit grew by almost 10% per year since June, dipping slightly in September to 9.9%.

UK consumer credit figures
UK consumer credit figures Photograph: Bank of England

The Bank of England also reports that the number of mortgage approvals fell by exactly 1,000 last month to 66,232. That’s close to the recent average, but may show a cooling in demand...

UK mortgage approval figures
UK mortgage approval figures Photograph: Bank of England

Here’s another neat chart from the IFS, showing how chancellors like to hit the public with tax rises shortly after a general election (perhaps hoping that we’ll have forgotten by the time we vote again)

IFS report
IFS report Photograph: IFS

But, as Paul Johnson warned on the Today programme.... parliament isn’t in the mood to raise taxes.

Updated

The BBC’s Kamal Ahmed points out that the new budget black hole might be bigger than £20bn (as explained at 7.57am, it all depends on productivity...)

Here’s another stunning fact from the IFS: Britain’s economy would be 15% bigger, even adjusted for population increases, if it had continued to grow at its pre-crisis pace since 2008.

Instead, the economy didn’t really bounce back from its very sharp downturn after the financial crisis.

Apologies, we had a technical glitch with the comments this morning (OK, I might have forgotten to press the ‘On’ button). They’re turned on now.....

The Institute for Fiscal Studies’ report is online here.

It concludes with a grim assessment of the challenge facing ‘Spreadsheet Phil’ Hammond:

The first Budget of a new parliament is often the best chance a Chancellor has to set out her stall. She can raise taxes if need be, set an agenda for the next five years, and set in train economic and fiscal reforms. Mr Hammond, though, has been dealt a very tricky hand indeed. The political arithmetic makes any significant tax increase look very hard to deliver. It looks like he will face a substantial deterioration in the projected state of the public finances.

He will know that seven years of “austerity” have left many public services in a fragile state. And, in the known unknowns surrounding both the shape and impact of Brexit, he faces even greater than usual levels of economic uncertainty....

Which is why the chancellor may decide to ditch his goal of balancing the books by the mid 2020s...

Liberal Democrat leader Sir Vince Cable tweets:

And... here’s why the government’s deficit reduction strategy has spluttered.

Today’s report also shows that seven years of austerity have only brought Britain’s tax receipts and government spending back to its levels before the financial crisis:

The IFS says:

As national income fell between 2007–08 and 2009–10, public spending increased sharply as a share of national income while government revenues fell. Since then, most of the increase in spending has been unwound, such that it in 2017–18 it was 0.5% of national income greater than it was in 2007–08 (6.1% less 5.6%). This is an important fact. Seven years of cuts have served merely to return public spending to its pre-crisis level as a share of national income.

Total government receipts have risen by more as a share of national income since 2009–10 than they fell over the preceding two years, such that they are now 0.4% of national income greater than in 2007–08 (–1.1% plus 1.4%; numbers do not sum due to rounding). So overall borrowing is now only slightly greater than it was in 2007–08, with both receipts and spending slightly above their pre-crisis shares of national income.

Labour MP Jack Dromey isn’t impressed....

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Letwin: Public would accept higher taxer for NHS spending

Q: Could the government really raise taxes specifically to get more funding for social care and the NHS, as Oliver Letwin says?

IFS director Paul Johnson says it can be done in theory -- a chancellor can put a penny on income tax and say they’ll spend it on the NHS.

But that doesn’t mean that you actually change NHS spending as the revenues from that new ‘hypothecated’ tax rise and fall, Johnson warns, adding:

It’s just a tax rise to increase spending.

Letwin rebuts this. He argues that there could be legal safeguards that a new tax would be definitely be used on social care and the NHS. And that would be acceptable to the public, he says.

Labour’s Peter Dowd also criticises the idea. He says that after five or 10 years you can’t tell how money is going into spending because of hypothecation, and how much because of general taxation. It also becomes harder to decide how to spend the hypothecated tax revenues, as demands and priorities changes.

If you invest in productivity improvements, then eventually you don’t need “hypothecation and whizzes and wheezes”, Dowd declares.

Updated

Peter Dowd MP
Peter Dowd MP Photograph: House of Commons

Peter Dowd, Labour’s shadow chief secretary to the Treasury, is also on the Today programme.

Dowd argues that Britain needs more medium and long-term investment in the UK economy, to boost productivity.

Labour’s economic plan also includes raising taxes, but only for the top 5%, he adds.

Updated

Oliver Letwin.
Oliver Letwin.

Sir Oliver Letwin, a Conservative MP, says he believes the IFS is roughly right.

He believes that the UK should continue to aim for a balanced budget, as the medium-term risks facing the economy are considerable.

Letwin argues that there is a case for raising taxes, if the receipts were used to spend more on social care and the NHS.

Updated

IFS director Paul Johnson.
IFS director Paul Johnson.

Paul Johnson, director of the Institute for Fiscal Studies, is discussing the IFS’s report on the Radio 4’s Today Programme right now.

Johnson explains that Hammond needs to reduce spending or raise taxes if he’s serious about hitting his fiscal targets.

But the pressure is on him to do the opposite and rise spending - by eliminating the public sector pay cap, for example, or reversing cuts to benefits.

There’s also no appetite among MPs for tax rises.

But if he raises spending without raising taxes, he’s not sticking to his own fiscal targets.

Q: But Hammond could borrow more.... interest rates are very low.

Johnson points out that the UK’s borrowing costs have been low for many years - Hammond and George Osborne didn’t taken much advantage before.

Raises borrowing also means the UK has to repay more eventually.

Hammond could borrow more, but if he does then he’s ‘junking’ his own fiscal goals.

Q: So what would you do if you were the chancellor?

I’m very glad I’m not, Johnson replies.

There is a case for raising taxes a bit, and raising spending a bit more, but it’s not feasible to raise taxes right now.

In the end, Johnson concludes, Hammond may have to say he’s not fixated on getting the deficit eliminated by 2025. That would give him some flexibility to take some risks (and potentially borrow more).

Updated

Spain grows twice as fast as the UK (again)

Newsflash from Madrid: Spain’s GDP expanded by 0.8% in the third quarter of 2017.

That’s a solid result, and means Spanish economy grew twice as fast as Britain in the last quarter.

IFS report: What the papers say

The IFS’s gloomy forecast suggest Britain may struggle to balance the books by the middle of the next decade, warns the Financial Times.

As the FT’s Gemma Tetlow puts it:

When he took the job last year, the chancellor set himself the target of reducing public borrowing to less than 2 per cent of national income by 2020-21 and eliminating borrowing altogether by the mid-2020s.

The commitment to strict fiscal discipline was seen as one of the important dividing lines between the Conservative party and Labour in this year’s general election.

But Carl Emmerson, deputy director of the IFS, said on Monday: “Given all the current pressures and uncertainties — and the policy action that these might require — it is perhaps time to admit that a firm commitment to running a budget surplus from the mid-2020s onwards is no longer sensible.”

The BBC agrees that Hammond faces a tough balancing act in next month’s Budget.

The IFS says Mr Hammond is also under “increasingly intense” political pressure to spend more, while the Parliamentary arithmetic makes tax increases look difficult.

The chancellor has been dealt a “very tricky hand indeed”, it says.

“Does he allow higher borrowing to persist, does he add to that with more spending, or does he try to offset that with greater taxes?” said IFS deputy director Carl Emmerson.

“Public sector workers, the NHS, the prison service, schools and working-age benefit recipients, among others, would like more money.

City AM’s Jasper Jolly points out that Hammond could tackle his deficit problems by hiking taxes - although this would be unpopular....

The Budget on 22 November may also include new revenue-raising measures. One option floated by the Treasury is a clampdown on companies using self-employed contractors, rather than employees, to avoid paying national insurance.

Such a move could affect firms ranging from multinational behemoths like BP to tiny businesses with three employees, according to Jonathan Riley, head of tax at accountants Grant Thornton, as well as hitting professionals who are paid through personal service companies.

Deficit problems: The key charts

These charts how how Britain’s budget deficit could be billions of pounds bigger than was forecast, back in March:

IFS forecasts
The IFS’s new report Photograph: IFS
IFS forecasts
The IFS’s new report Photograph: IFS

It all depends how severely the Office for Budget Responsibility downgrades its forecasts for Britain’s productivity.

The £20bn deficit black hole is based on a moderate downgrade, to ‘weak’ productivity - which seems very plausible, given this year’s economic data.

But the OBR may conclude that productivity improvements will be ‘very poor’, at the recent rate of just 0.4% per year. If that happens, the deficit could still be £70bn by 2021-22 -- not the £17bn previously forecast.

As the IFS puts it:

If the OBR were to decide that the terrible productivity growth of the last seven years were now the new normal (the ‘very poor’ scenario, under which output per hour grows at just 0.4% a year), without further policy action structural borrowing would rise above 3% of national income (almost £70 billion) in 2021–22 and rise further thereafter.

Updated

Introduction: Budget black hole for Hammond

Britain’s Finance Secretary Philip Hammond.

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Philip Hammond has woken up to some bad news. According to the well-respected Institute for Fiscal Studies, the chancellor is facing a new £20bn black hole that could sink any hopes of a ‘giveaway budget’.

The IFS has calculated that Britain’s deficit is on track to still be £36bn by the 2012-22 fiscal year. That’s twice as much as the £17bn forecast earlier this year.

It erodes the ‘wriggle room’ which Hammond would hope to use to either cut taxes or boost public spending.

So what’s gone wrong?

In short, Britain’s long-running productivity problems means that growth is unlikely to be as strong as hoped, meaning the deficit will be even harder to eradicate:

My colleague Richard Partington explains:

The stark analysis adds to pressure on the chancellor as he appears increasingly trapped between the government’s fiscal targets and calls to raise spending as the economy deteriorates and uncertainty over Brexit persists. He is due to deliver his budget on 22 November.

“It is hard to see how the chancellor can both maintain the credibility of his fiscal targets and respond effectively to the growing demands for spending”, the IFS said.

At the root of the problem for Hammond is an admission by the government’s official economic forecaster that weak levels of productivity since the financial crisis are unlikely to improve any time soon. The Office for Budget Responsibility (OBR) has said it will need to significantly lower its estimates for the economic output per hour worked in Britain.

Brexit uncertainty is also weighing on the economy, says Paul Johnson, head of the IFS:

Here’s Richard’s full story:

I’ll pull together more details and reaction now....

The IFS report tees up a busy day for economic news. Later this morning the Bank of England will release new figures showing how much Britons borrowed in September; this will show whether the consumer credit boom is cooling.

We also get new growth figures from Spain – which is timely, as the Catalonian independence crisis deepens by the day. Plus, a fresh reading of Germany’s inflation rate.

Here’s the agenda

  • 8am GMT: Spanish GDP growth report for July-September
  • 9.30am GMT: UK consumer credit and mortgage approvals report
  • 10am GMT: Eurozone economic confidence figures for October
  • 1pm GMT: German consumer prices figures for October

Updated

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