24 November 2025: Shoppers are awaiting the Budget and Black Friday

The week has been an exceptionally long time arriving, with Rachel Reeves' budget finally about to be delivered.

Speculation about what will be contained in Reeves’ speech has been going on since the Prime Minister confirmed the date of the Budget in the House of Commons in the Spring.

This Government will likely be known as the one that made the most U-turns in history, as Labour’s backbenchers, most of whom arrived only last July, have flexed their muscles, leading to questions about Sir Keir Starmer’s ability to control them.

The level of “advance publicity” has made this Budget the most eagerly awaited in years. It feels like the build-up to a Taylor Swift or Beyoncé concert, rather than a vital stage in the Government’s term.

Andy Haldane, who spent more than 30 years working for the Bank of England as its Chief Economist, said on Friday that 'costly' speculation about tax rises had caused growth to 'flat line' in recent months.

As she scrambles to balance the books, Reeves is expected to raise billions by freezing income tax thresholds for the life of this Parliament. She is also rumoured to be plotting a raid on salary sacrifice schemes, including a “mansion tax” on expensive homes and a “pay-per-mile levy on electric cars.

Even speculation is not beyond a U-turn for this Government, as Reeves is believed to no longer be considering a hike in the basic rate of income tax. She held a press conference to fuel speculation about the measures she is considering. The former Head of the Institute for Fiscal Studies has labelled Reeves' actions as a “shambles”. However, one of Ms Reeves's fellow Cabinet ministers defended the pre-Budget process and blamed the Office for Budget Responsibility (OBR) watchdog for uncertainty.

Prime Minister Keir Starmer has suggested that Chancellor Rachel Reeves faces more abuse because she is a woman. He told reporters he was “acutely aware” that women in public roles get much more abuse and criticism than men. He may have inadvertently supported the Leader of the Opposition, Kemi Badenoch.

Reeves has promised to “grip the cost of living” in the budget as she prepares to scrap the two-child welfare limit and freeze rail fares, while putting forward a multibillion-pound tax-raising package.

The chancellor is preparing to give her second budget on Wednesday after weeks of uncertainty about the scale of the tax rises she will need to impose to plug a financial hole of about £20bn.

Writing in the Mirror and The Sunday Times this weekend, the chancellor acknowledged that high prices “hit ordinary families most” and the economy “feels stuck” for too many.

“That’s why in my budget on Wednesday, I will take action to grip the cost of living,” she said.

Speculation about what Reeves’ speech would contain saw the pound lose ground last week, threatening its short-term support. It fell to 1.3080 and closed at 1.3105.

No fewer than five members of the FOMC made speeches on Friday, and the mix of their comments shows how split the rate-setting committee is regarding changes to monetary policy.

The “Trump faction” pushed for cuts, while Powell allies stressed inflation fears ahead of the December meeting. “The fact that the inflation rate remains high is concerning,” (Michael Barr). “In my view, a 0.5 percentage point cut in the benchmark interest rate in December is appropriate, and at least a 0.25 percentage point cut should be made,” (Stephen Miran).

The U.S. government shutdown, which delayed the September employment data, was released on the 20th, further complicating the Federal Reserve’s benchmark interest rate decision at the December meeting, which was already difficult to predict. This is because the employment data could be interpreted as grounds for either a rate cut or freeze, as FOMC members increasingly split along pro and anti-Trump lines.

Due to the shutdown, the October employment data was not even surveyed, leaving the September report as the last available before the rate decision. The Fed bases its rate decisions on its dual mandate of price stability and maximum employment. The White House has been pressuring for rate cuts almost daily. The Fed’s final rate-setting meeting of the year will be held on the 9th and 10th of next month.

Trump has achieved the most traction that is possible while Jerome Powell remains at the helm of the Central Bank. His supporters believe that Powell has been singularly responsible for the issues the public is facing.

According to the employment report released by the U.S. Bureau of Labor Statistics on the 20th, non-farm payrolls in September increased by 119,000, more than double the market expectation of 50,000. However, the unemployment rate edged up to 4.4% from 4.3% in August. Additionally, the August employment data was revised, changing from a previously announced increase of 22,000 to a decrease of 4,000.

The data could be interpreted as neither clearly positive nor negative for employment. After the report’s release, the Chicago Mercantile Exchange’s FedWatch Tool showed a 61% chance of a rate freeze, down from 67% the previous day, though still higher than the 33% probability of a cut.

In a U.S. economy that defies traditional metrics, a perplexing paradox is emerging: robust growth paired with stagnant job creation. Federal Reserve officials are increasingly alarmed by what they’re calling a ‘jobless boom,’ primarily driven by artificial intelligence’s rapid infiltration into corporate operations.

Something in the US economy isn’t adding up, and it’s rattling the people charged with wrangling inflation and keeping the labour market intact.

Powell elaborated during a speech, warning that AI-fueled investment is propping up growth but eroding hiring. The adoption of labour-saving artificial intelligence technology could help push down inflation to pre-pandemic levels, but it could also lead to job losses along the way.

Enterprises are deploying AI for tasks from customer service to coding, slashing the need for entry-level roles. Tech giants like Microsoft and Google have reported productivity gains of 20-30% in AI-integrated divisions, per earnings calls, without corresponding headcount increases.

The dollar index rallied to a high of 100.39 last week and closed at 100.16. Technically, the weekly close above the 100 level is a positive sign, but the volatility around the FOMC’s decision is likely to continue.

ECB President Christine Lagarde has warned that the lack of reform in the EU economy is seriously undermining growth and competitiveness. She delivered a scathing speech at the 35th European Banking Congress in Frankfurt, saying the European growth model was “linked to a world that is gradually disappearing”.

She also criticised politicians for six years of inaction, which has left the EU economy exposed to significant risks. “Another six years of delay would not only be disappointing, it would be irresponsible”, she said.

In her speech, Lagarde stressed that exports could no longer be the bulwark of a globally favourable environment. The ECB forecast predicted that eurozone exports would grow by 8% by the summer of 2025, but reality has shown that this has not happened.

While she did not mention Germany directly, she pointed out that countries with large industrial sectors are experiencing a prolonged decline in output. “This year’s experience has shown that a strong domestic economy can protect Europe from global turbulence”, she said.

Lagarde specifically warned of internal barriers within the EU: "The Central Bank’s analysis reveals that the current barriers are equivalent to a tariff of 100% on services and 65% on goods." She called for reducing bureaucratic and regulatory barriers and harmonising tax and legal frameworks among member states.

"European weaknesses do not result in dramatic crises, but quietly erode growth, while each new shock lowers the economy to a lower level of the permanent trajectory," she added.

Lagarde’s comments highlighted how the entire European Community relied on the “ECB to solve every issue it faces”. At the same time, at the other end of the spectrum, the European Parliament continues to be “the most highly paid debating society” in the world.

The Eurozone’s economic recovery continued into November, according to the flash PMI, meaning the fourth quarter so far has seen the best upturn in business activity for two and a half years.

Growth remains relatively modest, however, tempered by subdued business optimism about the economic outlook and uncertainty over the political landscapes both domestically and internationally.

Selling price inflation, meanwhile, cooled, which, alongside the modest but improved growth performance seen in recent months, likely leaves the ECB in a holding position on monetary policy.

A solid rise in output in November after an improved performance in October represents the best back-to-back monthly expansions for eurozone businesses since the spring of 2023.

The seasonally adjusted HCOB Flash Eurozone Composite PMI Output Index, based on approximately 85% of usual survey responses and compiled by S&P Global, posted 52.4 in November, down only fractionally from 52.5 in October and therefore signalling a further solid monthly rise in business activity.

The Euro fell back to its short-term support level last week, reaching a low of 1.1491. The support is at 1.1480. It managed to claw its way back to 1.1571 following the better economic data.

Have a great day!