Daily update
Daily update
- US consumers are gearing up for the most important celebration on the national calendar; Black Friday sales. Increasing consumer awareness of profit-led inflation may shift focus from flashy headline discount numbers to the question “is this price lower than it was a year ago?”. Deflation of durable goods means that for big ticket items the answer is probably “yes”.
- Europe is offering assorted business sentiment polls that can be disregarded. The ECB’s “account” of its last policy meeting is likely to continue to try and manipulate the expectations of the bond market vigilantes, with limited chance of success.
- The Dutch far-right Freedom Party won the largest number of seats in Wednesday’s parliamentary election, giving them first chance to form a government. The results are consistent with global trends in a period of structural upheaval. Declining party membership increases political polarization. Economic uncertainty and the fear of loss of social status encourage scapegoat economics (blaming complex causes of change on a minority group). That in turn encourages economic nationalism or prejudice politics.
- The UK Chancellor announced a modest scaling back of fiscal tightening, but fiscal policy is still set to be a drag on economic growth next year. Early national insurance cuts have political geeks excited about a possible May 2024 election date.
