Fiscal drag is damaging progress, says Bank rate-setter
Thanks for joining us. There is less than a week to go until the Budget and consumers are feeling the least confident all year.
Over 65s are now the most downbeat age group in the country, according to PwC, after Rachel Reeves scrapped winter fuel payments for households not receiving pension credit.
The Chancellor is expected to announce a host of tax rises in the Budget on October 30 as part of a £40bn plan to shore up the public finances.
5 things to start your day
1) Andrew Bailey: Don’t force pension funds to invest in Britain | The Bank of England chief urged reform of the ‘quite fragmented’ pension industry
2) Rayner to give union members twice as much time to strike | Workers’ rights reforms could give unions a year-long mandate to strike
3) How Silicon Valley is sparking a new nuclear age | Bill Gates is bankrolling big tech’s AI-fuelled demand for power
4) Britain in ‘real danger’ of flood of HS2-style white elephants | Ministers’ flip-flopping on major projects must stop, warns boss of BAM UK and Ireland
5) Sam Ashworth-Hayes: It’s time for the young and ambitious to leave Britain | Rachel Reeves’s Budget will herald a new era of unprecedented state command and control
What happened overnight
Shares retreated in Asia after a third straight day of losses on Wall Street as its long, record-breaking rally lost more steam.
Japan’s benchmark Nikkei 225 shed early gains, trading flat at 38,104.86 as purchasing manager indexes showed worsening conditions in Japan for both manufacturing and services. The overall composite PMI compiled by au Jibun Bank fell to a two-year low.
Chinese markets also fell, with Hong Kong’s Hang Seng losing 1pc to 20,555.04 while the Shanghai Composite index shed 0.5pc to 3,286.17.
In Seoul, the Kospi gave up 0.2pc to 2,593.57 and Australia’s S&P/ASX 200 edged 0.1pc higher to 8,225.90.
Taiwan’s Taiex lost 0.5pc and the Sensex in India edged 0.2pc lower.
On Wall Street, all three main indexes finished lower yesterday. The Dow Jones Industrial Average fell 1pc to 42,514.95, the S&P 500 fell 0.9pc to 5,797.42 and the Nasdaq Composite fell 1.6pc to 18,276.65.
In the bond market, the yield of 10-year US Treasury notes rose to 4.243pc from 4.231pc late on Tuesday.
