POWER: UK Spot Falls Sharply, Gains Capped on 8 December Amid Strong Winds
The UK spot dropped sharply as lower power demand and gas consumption, coupled with stronger winds, weighed down the product. Looking ahead, price increases due to rising demand from the weekend on 8 December are likely to be capped as wind is expected at a 54% load factor.
- The UK spot power index on the Epex Spot dropped to £64.50/MWh, compared with £78.33/MWh for Friday’s delivery.
- The peak-load spot index settled at £75.04/MWh, compared with £85.09/MWh in the previous session.
- Wind output in the UK is forecast at 14.90GW during base load on Saturday, or a 52% load factor, up from 14.64GW on Friday, according to SpotRenewables.
- Wind will then be at 11.25GW on Sunday before rising to 15.53GW on Monday.
- Additionally, UK wind is expected to be on a steady downward trend from 10 December to reach a 28% load factor on 13 December.
- Average temperatures in London are forecast to rise to 9.8C on 6 December from 5.4C on 5 December and above the seasonal norm of about 6C.
- Furthermore, mean temperatures in London have been generally revised lower over 5-10 December. Despite this, temperatures are still anticipated to be mostly above the seasonal average throughout the 14-day ECMWF forecast – only dipping below around 18-19 December.
- Gas consumption in the UK will drop sharply to 166.89Mcm on 6 December compared to 208.7Mcm on 5 December.
- Power demand in the UK has been revised lower over 5-9 December by as much as 800MW. Demand is forecast to drop to 32.23GW on Saturday compared to 35.51GW on Friday, according to Bloomberg.
- Demand will then be at 31.22GW on Sunday before rising to 33.97GW on Monday.
- Planned maintenance at the 2GW IFA power interconnector between the UK and France will return to the grid at 13:00 UTC, extended slightly from 11:00UTC, remit data showed.
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EUROZONE DATA: Oct PMIs: Growth Momentum Improving Everywhere Except France
The October PMI round signalled a positive start to Eurozone growth momentum in Q4. With Q3 flash GDP having already printed above the ECB's September projections, the case for unchanged policy rates going forward is growing. However, some ECB officials remain cognisant of downside risks heading into 2026.
Following upward revisions in France and Germany, and stronger-than-expected readings in Italy and Spain, the Eurozone services PMI was revised up to 53.0 (vs 52.6 flash, 51.3 prior). With the manufacturing PMI confirming flash estimates at 50.0 on Monday, this left the composite reading at a 29-month high of 52.5.
At a country level, France's underperformance amid ongoing political uncertainty remains stark.
Summary from the final October composite PMI release:
- "The euro area economy saw its strongest expansion since May 2023 during October, with growth accelerating and tentatively pointing to a breakout from the subdued trend seen in the first nine months of the year. This sharper upturn was supported by improved demand conditions as new business rose at the steepest pace for two-and-a-half years. Employment growth meanwhile quickened to a 16-month high, despite a slight weakening of businesses’ year-ahead activity expectations".
- "As for prices, input cost inflation eased for a second month running, taking it further below its historic average. Euro area companies were more aggressive with their price setting, however, lifting their charges to the greatest extent in seven months"
UK DATA: Upward Revision To Oct Services PMI, But Fall In Employment Still Noted
Momentum in UK services activity remains positive, though October’s 52.3 final read remains below August’s 54.2. While stronger new orders supported the aggregate index, another reduction in employment numbers and easing output charge inflation will be noted by the BOE.
Key notes from the UK services PMI release:
- “Survey respondents cited a gradual turnaround in new work and sales opportunities, despite elevated business uncertainty and delayed decision-making among clients”
- “Anecdotal evidence suggested that a rebound in order books and successful new product launches had helped to boost business activity in October.”…“Stronger order books appeared to reflect rising domestic demand, with service providers noting increased marketing spending and greater sales enquiries. In contrast, new work from abroad decreased for the second month running”
- “October data pointed to only a slight reduction in employment numbers across the service economy” … “Where a reduction in headcount was reported, this mainly reflected efforts to offset higher payroll costs through the non-replacement of voluntary leavers.”
- “Input cost inflation remained historically strong , but moderated for the second month running to its lowest since November 2024. Higher salary payments were commonly reported”
- “ Average prices charged by service providers meanwhile increased at the slowest pace since June,”
MNI: UK OCT FINAL SERV PMI 52.3 (51.1 FLASH, 50.8 SEP)
- MNI: UK OCT FINAL SERV PMI 52.3 (51.1 FLASH, 50.8 SEP)
- UK OCT FINAL COMPOSITE PMI 52.2 (51.1 FLASH, 50.1 SEP)
