UK tax and spending plan delayed.

UK tax and spending plan has been delayed from Monday 31st of October until the 17th of November. It was due on Monday, but Chancellor Jeremy Hunt said moving it to 17 November would mean it was based on the most accurate economic forecasts. Mr Hunt had already scrapped his predecessor’s plans for huge tax cuts. This had sparked market turmoil due to fears over how they would be paid for. The move settled investors and lessened the urgency for a new economic plan.

The delay means that the Bank of England will make its next decision on interest rates on the 3rd of November without knowing what the government’s plan. It is expected that there will be a 75-basis point rate hike at the next meeting although there is talk of a 100-basis point rate hike. inflation was at a 40-year high of 10.1% in September, more than five times the BoE’s 2% target, adding to pressure on the central bank to act, a move which would add to the burden faced by indebted consumers.

Today the market spotlight will turn to the ECB monetary policy meeting. A second consecutive 75bps rate hike is widely expected. This would bring the deposit rate up to 1.5%. Reports suggest that the Governing Council has held discussions regarding its bond-buying programmes over the past number of weeks, with a view to starting QT at some point down the road.

The European Union could introduce a gas price cap this winter to limit excessive price spikes, but only if countries give Brussels a mandate to propose the measure, the bloc’s energy chief said on Wednesday. After months of high gas prices driven by Russia slashing supplies, the 27-country EU is considering whether to cap prices – although with countries still split over the idea after weeks of talks, Brussels has not yet made a formal proposal to make it happen. EU energy commissioner Kadri Simson said it would still be possible to have that cap in time for winter. The Commission has said the price limit would be designed to kick in as a “last resort measure” if prices spike.

President Joe Biden’s approval rating edged closer to the lowest level of his presidency just two weeks before U.S. midterm elections that will shape the rest of this term, a opinion poll completed on Tuesday found. The two-day national poll found that 39% of Americans approve of Biden’s job performance, a percentage point lower than a week earlier.

Biden’s unpopularity is helping drive the view that Republicans will win control of the U.S. House of Representatives and possibly also the Senate on Nov. 8. Control of even one chamber of Congress would give Republicans the power to bring Biden’s legislative agenda to a halt. Taking office in January 2021 in the middle of the COVID-19 pandemic, Biden’s term has been marked by the economic scars of the global health crisis, including soaring inflation. This year, his approval rating drifted to as low as 36% in May and June.

Economic Calendar

12:15ECB Monetary Policy Decision Statement
12:30USD Durable Goods Orders(Sep)0.6%-0.2%
12:30USD Gross Domestic Product Annualized(Q3)2.4%-0.6%
12:30USD Initial Jobless Claims(Oct 21)220k214k
12:45ECB Press Conference

*All rates shown are indicative of interbank rates and should only be used for indication purposes only. It is important to note that foreign exchange rates fluctuate and that rates may vary depending on the amount and the base currency that is purchased or sold. Rates are correct as of 8:00am UK time. CentralFX are not responsible for the rates shown.