UK: Changes in UK market drivers post-Nov MPC (1/2)
As we wrote in our BOE Review (see full PDF here), we think that if labour and inflation data comes in line with the Bank’s updated near-term projections and the Budget is broadly in line with expectations (with some disinflationary measures and an income tax increase) we think it would be likely that Governor Bailey would support a December rate cut. We also think that the views of the other 8 MPC members are more entrenched than we had previously expected (despite the 5-4 vote in line with our base case). This has three main implications for UK market drivers in the coming weeks:
- 1) Speeches from Governor Bailey will have huge focus on them – particularly after the first round of labour and inflation data. He hasn’t made clear if he will only vote a cut if data comes in softer than the Bank’s projections or if it is in line with those projections. We look at this in more detail in the BOE review but the takeaway is that it will be harder for the data to undershoot expectations: private regular wage Q3 expectations are 0.4ppt below the Bank’s August projections; services CPI is expected to not see any bounceback in October and to continue to decelerate at a faster pace than the August MPR projections. The only category of CPI that appears to not have a high bar to see data coming in below the November projections is the “food and non-alcoholic beverages” category. The problem is that Governor Bailey currently has no speeches scheduled.
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US: Trump Oval Office Announcement Underway Shortly
US President Donald Trump is shortly due to deliver an announcement in the White House Oval Office. LIVESTREAM The announcement is expected to relate to drug pricing and could follow a similar template to a recent pledge from Pfizer.
- The announcement will be Trump's first press remarks since a market-moving Truth Social statement earlier today in which Trump suggested calling off a meeting with Chinese President Xi Jinping and raising tariffs on China in response to new export controls from Beijing on rare earths. See earlier bullets here and here.
RATINGS: Moody's Completes Periodic Review Of Belgium, No Rating Action
No ratings actions for Belgium from Moody's, which is quoted in a press release on Bloomberg: "Moody's Ratings (Moody's) has completed a periodic review of the ratings of Belgium and other ratings that are associated with this issuer. The review was conducted through a rating committee held on 2 October 2025 in which we reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), and recent developments. This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future."
- There had been some speculation there could be a ratings action - MNI wrote Thursday: "* Moody's on Belgium (Current rating Aa3, Outlook Negative): We expect Moody's to maintain their current stance in the absence of 2026 budget details."
MACRO ANALYSIS: US Macro Week Ahead: No CPI, But Plenty Of Pre-Blackout FedSpeak
Below is the week’s data schedule, with MNI’s annotation of whether or not data will be postponed.
- As we went to press, the Fed announced that next week's Industrial Production data will be postponed (was due to be published next Friday Oct 17) as the data “incorporate a range of data from other government agencies, the publication of which has been delayed as a result of the federal government shutdown.”
- We won’t be getting September CPI as scheduled on Oct 15, but at least the BLS announced it will publish the data on Oct 24.
- As such next week we’ll be looking at some under-covered data points, including the Redbook weekly and Chicago Fed’s CARTS retail sales data (in lieu of the Census Bureau retail sales report), with a little more focus than usual on regional Fed manufacturing indices (NY, Philadelphia).
- Once again, the dearth of tier-one data leaves Fed commentary in focus ahead of the pre-FOMC blackout period: highlights for us are Philadelphia Fed President Paulson making her first comments on monetary policy on Monday since being appointed in the summer, while as always Chair Powell bears watching on Tuesday (we also hear from Bowman, Waller, Collins, Miran, Schmid, and Musalem).
- Additionally we get the latest Beige Book which was already key given the FOMC was already increasingly focused on anecdotal information as it attempts to navigate murky economic waters.
