- ONS says transportation delays resulted in shortages of electrical goods
- AstraZeneca publishes positive results from Covid-19 antibody therapy
- Apple delays office return to January
- M&S shares jump after rare profit upgrade
- Introduction
Here is more analysis of the UK’s public finances from the Institute of Chartered Accountants in England and Wales, and a look ahead to the three-year spending review in October.
Alison Ring, ICAEW public sector director, said:
Last month registered the second-highest July deficit on record, which further emphasises the weak fiscal foundations underpinning the upcoming three-year Spending Review in October.
There is a difficult choice to be made on the state pension, which at over £105bn a year is the second largest individual item in the public sector budget after the NHS. Sticking with the triple lock formula could make a significant contribution to increasing pensioner incomes, but would reduce the amount available for public services by tens of billions of pounds over the coming decade.
Global shares are falling for the fifth day in a row, putting them on course for the biggest weekly drop since February, as traders worried about rising coronavirus cases, slower Chinese econmic growth and the Fed’s taper of its asset purchase programme. The MSCI World index, a broad gauge of global shares, fell as much as 0.7% today.
The dollar is holding firm as investors sought out safer investments. The dollar index, which measures the greenback against six other currencies, rose to 93.685 for the first time since early November. Gold, another safe haven investment, increased 0.2% to $1,784 an ounce, and is heading for its second week off gains.
The Delta variant remains the biggest worry for investors right now, and along with the question of waning vaccine efficacy has made the risks to the outlook much more pronounced relative to just a few months ago.
However, nervousness about possible tapering by the Fed ahead of next week’s Jackson Hole speech by chair [Jerome] Powell, along with a potential Chinese growth slowdown have further played on investors’ minds, and brought the narrative a long way from the reflation hopes many had back in the first quarter.