Good morning, and welcome to our rolling coverage of the financial markets, the world economy, the eurozone and business.
Millions of UK pensioners and public sector workers, and thousands of businesses around the country, will be affected by new inflation figures being released today
September’s consumer prices index will show how the cost of living rose last month.
But crucially, it will be used to determine Britain’s state pension “triple lock”. It will also determine increases in public sector pensions for teachers, NHS workers and the police.
The Triple Lock is a pledge that pensions will increase each April in line with wages, earnings, or 2.5%, whichever is higher.
City economists predict that CPI will have risen by 2.6% per year in September, with guesstimates varying from 2.4% up to 2.8%.
So with average earnings rising by 2.6%, today’s inflation reading will determine just how much Britain’s state pension will rise by in April 2019. It’s currently £164.35 per week (equivalent to £8,546.20 per year).
The Triple Lock does have its critics — the Conservative Party proposed dropping the 2.5% floor in the last election, while the International Monetary Fund thinks it is too expensive. But others argue that pensioners deserve a decent increase, and to be protected from the ravages of inflation.
But Britain’s hard-pressed companies will hit in the pocket by a large jump in inflation, as CPI is used to set business rates.
Press Association explains:
Business rates – which essentially serve as specific property taxes for resident businesses – could go up by as much as 819.23 million in England if the headline rate of inflation remains unchanged at 2.7%, according to real estate advisor Altus Group.
It said 209.76 million would be paid by the ailing retail sector, which has seen a number of players go bust in recent month amid higher costs and lower consumer spending.
So there’ll be a lot of interest when the Consumer Price Index figures are released, along with a new survey of UK house prices.
Also coming up today
Investors are in a cheerier mood, after Wall Street posted its strongest gains in almost seven months last night.
The Dow surged by almost 550 points, as the markets shook off last week’s worries:
Netflix brought more cheer after the closing bell, by reporting a big jump in subscribers.
Later today we get the minutes of the US Federal Reserve’s last meeting, when it raised interest rates to 2.25%.
Following that meeting, Donald Trump launched several attacks on the Fed for being too aggressive. Last night, he made a fresh assault, claiming that the central bank was his biggest threat, adding:
It’s going too fast. Because, you looked at the last inflation numbers, they’re very low.
So much for central bank independence….
- 9.30am BST: UK inflation data for September
- 9.30am BST: UK house price figures for August
- 3.30pm BST: US weekly oil inventory data