In the UK, businesses scaled back their hiring plans last month, reflecting the cautious approach adopted by employers ahead of the Labour government’s autumn budget announcement. Business confidence also hit its lowest level since January 2023, with BDO’s Optimism Index falling by 5.81 points to 93.49. This decline appears again to be an immediate response to the budget, and it remains to be seen whether this trend will persist. However, the data potentially reflects concerns amongst firms that Rachel Reeves’ new fiscal initiatives will lead to higher unemployment and an increase in prices.
Chinese officials on Monday pledged to ramp up stimulus measures after a weak inflation readout. Policymakers have shifted their monetary stance from “prudent” to “moderately loose” for the first time in 14 years, aiming to boost consumption, enhance investment efficiency, and strengthen domestic demand. Following the announcement, China’s 10-year bond yields dropped to 1.92%, reflecting market optimism. The Hang Seng Index also surged 3.14%, signalling investor confidence in the new policy direction and its potential to stimulate economic growth amidst challenging global conditions. The announcement came at an opportune time, as the latest trade data showed a rapid slowdown in export growth during November – to 6.7% from 12.7% in October – while imports unexpectedly contracted by 3.9% – sending stocks indices on mixed performance.
