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Daily update

  • Japan’s disinflation was on display with the Tokyo consumer price measure for September. As ever, local factors are important (service sector inflation was softened by weaker hotel prices, for instance). Retail sales seem to have a slowing momentum, which may keep domestically determined inflation pressures in check.
  • UK second-quarter GDP was unrevised on the headline, but the details were adjusted and the first quarter was revised stronger. This follows from a significant positive shift in the UK’s post-pandemic growth narrative. Investment was a more important driver of growth, suggesting companies did not believe the initial pessimism on the UK economy either.
  • France and Italy will come out with consumer price inflation figures, in the wake of the meaningful slowdown in German inflation data yesterday. This should add up to another slowdown in the overall Eurozone flash figure for September. ECB President Lagarde is speaking, because what day would be complete without hearing from ECB President Lagarde?
  • From the US we get August’s personal income, personal spending, and personal consumer expenditure deflator data. Remember that middle-income consumers have more spending power than headline inflation figures suggest (unless they are in an inflation hotspot like Florida). That should help sustain consumer spending.

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