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Astute Market Overview - 29th November 2023

Hello, and welcome to the latest Astute Market Overview.

Since our last overview, the US markets closed briefly for Thanksgiving and the Chancellor of the Ex-Chequer revealed his Autumn Statement, now the Black Friday sales are (nearly) over and December is now within touching distance.

Let’s turn to the Eurozone first, with Eurozone Consumer Prices Index (CPI) inflation coming in at 2.9% for October, a climb down from 10.6% in October 2022, with energy prices a large detractor from the headline figure.

Turning to the price of oil: the cost of crude oil is a factor (amongst others) in the cost of petrol at the pump, albeit the price of crude oil is much more volatile. A petrol station nearby in Cheshire advertises their low petrol and diesel prices on Facebook, and are usually 10p cheaper than competitors in the area! Consequently, there’s often traffic on the main road on which it sits. Clearly, the high-cost of oil (and petrol) last year was felt acutely by many of us, however petrol and heating oils aren’t the only area of inflation impacted by crude oil prices increase. Given that oil is a key component in shipping and manufacturing many goods, it’s cost feeds through to many of the goods and services that we consume.

Brent crude oil prices are now well below their summer 2022 highs, at around $82 per barrel of brent crude oil this week. Whilst risks around high prices remain, the threat of energy prices dramatically increasing and stoking inflation, is waning.

Next up, the UK, where inflation continues to be reined in. The British Retail Consortium reported their shop price inflation measure came in at 4.3%, its lowest since June 2022, and a 0.9% fall from October.

The Office for National Statistics released their measure of UK retail sales. Both unseasonable warm weather and wet weather have been blamed for a fall in retail sales volumes in September and October, with the warm weather supressing autumnal clothing sales, and wet weather keeping footfall down. This resulted in gloomy picture for the UK high street, as latest data shows a fall in spending for October, in addition to a downgrade for September (1.1%).

And finally, over the period the Autumn Statement was revealed by the chancellor, Jeremy Hunt. We released an overview of the statement last week, and have pulled together a document containing a detailed breakdown, which we will published this week.

The standout change in the statement was a cut to national insurance contributions. The employee national insurance cuts (main rate of class 1 contributions down from 12% to 10%) will boost household disposable income by £8.7bn in 24/25. Given that a portion of this money back in our pockets is likely to be put towards savings, and some spent on imported goods, not all of it will be fed into the economy. Therefore, this cut is likely to add a small boost to demand, but hopefully not enough to put some wind back into inflation’s sales.

And finally, the first transatlantic flight by a large passenger plane powered by sustainable aviation fuel completed its journey this week, successfully landing in New York after setting off from London on Tuesday.

Coming up, there is due to be an OPEC+ meeting (an group of countries who come together to adjust crude oil production and bring stability to the oil market), we’ll see US jobs data, and eurozone retail sales.

See you next time.

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Autumn Statement 2023

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Autumn Statement Overview – Our Comprehensive PDF