UK DATA: MNI UK Inflation Preview - October 2024
Nov-19 15:42
- After reaching its near-term trough in September, UK CPI is expected to increase in October, largely driven by utilities prices, but the main focus will remain on services inflation which is expected to remain broadly unchanged.
- Consensus expects the more important services CPI to print broadly around the same level as in September (MNI median 4.9%, MNI mean 4.91%, Bloomberg consensus 4.9%, BOE 4.97%). We remain wary of upside risks from air fares.
- We also see the potential for moves higher in clothing and second hand car prices within core goods.
- A decent surprise either way in services CPI could move the market, but if the upside risks that we have identified prevail to see a higher-than-consensus print we still think there is scope for cuts at least in February and May (which aren’t quite fully priced by the market yet). We therefore think there is potential for a bigger market move on a downside surprise.
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RATINGS: UK, Italy Affirmed by S&P; Scope Downgrades France
Oct-18 21:02
Recapping sovereign ratings actions today:
- S&P affirms Italy's Long-Term Local Currency Debt Rating at BBB, outlook remains stable
- S&P affirms the UK's Long-Term Local Currency Debt Rating at AA, outlook remains stable
- Scope downgraded France to AA- (from AA) with a stable outlook
- S&P did not affirm/update the ratings of Greece or the Netherlands as part of their semi-annual review of the sovereigns.
US FISCAL: Budget Deficit Rises As Interest Payments Soar
Oct-18 20:27
The US's September budget balance came in very close to expectations with a $64B surplus, just the 2nd monthly surplus posted in the 2024 fiscal year just ended (Monthly Treasury Statement here - PDF).
- For the fiscal year as a whole (Oct-Sep), the nominal deficit came in at $1.83T, equating to 6.4% of GDP - that's up from $1.70T in FY 2023 (6.2% of GDP).
- For the year, revenues rose by a little under $500B but outlays grew by over $600B. Notably, interest rose 29% to $1.13T (net $882B), with the net figure 3.06% of GDP: the highest since 1996. That came as the weighted average interest rate of debt outstanding rose 35bp on the year to 3.32%, while social security payments rose by $103B on higher cost of living increases and more retirees.
- The 2025 fiscal year deficit is not expected to be much changed as a percentage of GDP, though that could depend on the November election results.
- CBO director Phillip Swagel told MNI recently America has fiscal headroom in the near-term but spending is on an unsustainable track over the long-term (link).
MNI: US SEP TREASURY BUDGET $64.3B
Oct-18 20:00
- MNI: US SEP TREASURY BUDGET $64.3B
