13 November 2025: Reeves has been urged to prioritise lowering electricity bills

While the Labour Party threatens to tear itself apart, the Chancellor appears to have shut herself away to add the final touches to her second Autumn Budget. Her first effort was not well received by the public in general, with farmers and pensioners staging protests as their tax and benefit status was weakened considerably.

This year, partners in limited liability partnerships appear to be in the crosshairs, but there may still be a “sting in the tail” with the basic rate of income rumoured to be increased by a penny in the pound for the first time in 50 years.

Reeves is fond of telling reporters that most of the unpopular measures she introduces were forced upon her and are often the lesser of two evils, while she has yet to do anything that has proven popular with voters.

The economy is still struggling to make significant headway, with financial markets concerned that a relatively minor bump in the road could tip the country into recession.

Consumer card spending in the United Kingdom fell by 0.8% year-on-year in October, a slight drop from September (down 0.7%), according to Barclays.

Essential spending declined by 2.5 percent for the sixth consecutive month. In comparison, growth in discretionary spending was flat (+0.1%), as a combination of pre-budget anticipation, upcoming Black Friday deals, and milder weather led consumers to delay purchases or cut back across several categories.

In October, all seven measures of consumer and economic confidence tracked by Barclays declined for the first time since August 2022, when the Bank of England announced its biggest base rate increase in 27 years.

Confidence in the strength of the UK, European, and global economies declined month-on-month by 22%, 28%, and 23%, respectively.

However, confidence in household finances fell most significantly, from 74% to 63%.

Following this week’s rise in unemployment, the proportions of those confident in their job security and in their ability to spend on non-essential items both reached their lowest levels since 2023, at 44% and 51%, respectively—down from 47% and 60% in September.

Rumours of a plan to remove Keir Starmer as Prime Minister and Leader of the Labour Party continue to swirl around Westminster, with the Health Secretary, Wes Streeting, apparently front and centre of the plan, something he strongly denies.

The pound is in a narrow range overall, trading between 1.3025 and 1.3140. Yesterday it reached a low of 1.3084 and closed at 1.3130.

Like the plot of a Shakespeare play, the corpse of disgraced financier Jeffrey Epstein continues to “rise from the grave” to haunt global figures. Having destroyed Prince Andrew's public image, emails exchanged between Epstein and his former partner, Ghislaine Maxwell, appear to show that President Trump was more involved in the drama than he wishes to admit.

Last evening, in the run-up to the crucial vote in Congress, which was expected to bring to an end the Federal Shutdown, Democrats, chastened by some of their group switching sides to vote with Republicans, released a further batch of emails that may yet prove damning for the President.

This story clearly still has “legs” with Trump’s critics eager to “dish any dirt” about his relationship with Epstein.

Atlanta Federal Reserve President Raphael Bostic, the first Black and openly gay person to lead one of the U.S. central bank's 12 regional banks, said yesterday that he will retire at the end of his current term on February 28, 2026, an unexpected departure amid a push by President Donald Trump for more influence over the Fed.

While Trump has not been able to gain entry to the FOMC through the Presidency of the Regional Fed, he is expected to continue trying to get his “people” elected.

Meanwhile, Federal Reserve Bank of Philadelphia President Anna Paulson said that emerging financial technologies hold "tremendous promise" to expand access and cut costs, but warned they also pose growing risks to data security and economic stability.

"The innovations that we are witnessing hold tremendous promise," Paulson said in remarks prepared for delivery at a Philly Fed fintech event, pointing to AI and machine learning, open banking and embedded finance. "They can expand access to financial services for the historically unbanked. They can reduce costs and friction in cross-border transactions. They can improve transparency and security in our markets."

On the flip side, "these opportunities lie substantial risks that demand our attention," she said. "Issues of data privacy and security grow more complex with each technological advance. The acceleration of financial transactions creates new vectors for systemic risk."

The FOMC’s most ardent dove, Stephen Miran, managed to stay on subject in a speech yesterday. In Miran's estimation, inflation will turn around soon. As evidence, he pointed to the fact that housing cost increases, which are by far the most critical component of inflation indexes, are slowing down. And since those prices take about a year to filter through into inflation measures such as the Consumer Price Index, there is already a lot of disinflation in the pipeline.

Therefore, he said, the Fed should be cutting rates aggressively, and the current interest rates are fighting yesterday's inflation battle, even though it is not the FOMC’s “style” to act pre-emptively. "I think Fed policy is too restrictive," he said. "I think that policy is being made on a backwards-looking basis."

The dollar index was virtually unchanged yesterday. It opened at 99.47 and closed at the same level with very little happening in between.

ECB Executive Board and Governing Council Member Isabel Schnabel is the most strident hawk on either committee. Even when making speeches praising the ECB for driving inflation down while seeing a gradual improvement in the economy, she can make dark predictions about what could lie ahead.

In her first speech in almost a month, the ECB’s Head of Market Operations told reporters that there is strong underlying momentum driving the economy forward. However, she tempered her remarks by saying she is still concerned about rising food inflation.

Given her stance, though, hawkish comments aren't seen as surprising.

Eurozone inflation is likely to fall too low, and risks may be skewed toward readings above forecast levels, but the European Central Bank can tolerate minor target deviations, according to Schnabel.

Christine Lagarde, President of the European Central Bank, is set to take over leadership of two major economic committees at the Bank for International Settlements, replacing U.S. Federal Reserve Chair Jerome Powell. Neither Central Banker has time on their side, with Powell set to leave the Fed next May, while Lagarde’s term expires in 2027, although there are constant rumours that she will leave early.

Powell has chaired the Global Economy Meeting, a forum of 30 Central Bank Governors, as well as the BIS Economic Consultative Committee since 2019, succeeding former Bank of England Governor Mark Carney, who has gone on to bigger things.

Lagarde will assume these roles upon the conclusion of Powell’s term at the Fed in May 2026, Reuters reports.

Finance ministers meeting today are expected to start talks on the sidelines for the Central Bank’s top jobs. One by one, the dominoes will begin to fall at the European Central Bank, as the institution prepares to turn the page on the Christine Lagarde era. A tenure marked by strategic adaptation amid overlapping global crises – from the pandemic to war-driven inflation - Lagarde’s shepherding of euro-area monetary policy has had a distinctly diplomatic and political style, as befits her background.

The ECB now stands on the cusp of a transformative moment, poised to begin a two-year shake-up that will overhaul two-thirds of its top leadership. Euro area finance ministers meet in Brussels today, where early talks will kick off on the sidelines, as nations commence horse-trading as part of a package deal on the top jobs.

In addition to Lagarde’s presidency, which expires in October 2027, the coming refit also covers the roles of vice president, chief economist, and an executive board member. First up for negotiation is the role of vice president, with Luis de Guindos’s term ending in May 2026. Contenders are starting to emerge ahead of a planned call for formal nominations in December.

The euro was also becalmed yesterday as traders began to move into year-end mode, protecting what they already have in terms of profitability.

The common currency reached a high of 1.1597 and closed at 1.1590

Have a great day!