Charting The Global Economy: UK, Japan Budgets; Wary US Consumers

Chancellor of the Exchequer Rachel Reeves did enough in the UK budget to help her and Prime Minister Keir Starmer survive for now, building back a vital fiscal buffer and expanding welfare.

Over in Japan, Prime Minister Sanae Takaichi’s government plans to issue more new bonds to fund its economic package than the corresponding amount last year, as concerns smolder over the nation’s public finances and rising yields.

In the US, consumers exercised caution going into the longest-ever government shutdown, and early signs suggest holiday spending will be concentrated more on snagging deals for essentials rather than discretionary items.

Here are some of the charts that appeared on Bloomberg this week on the latest developments in the global economy, markets and geopolitics:

Reeves expanded her key fiscal buffer to £22 billion ($29 billion) from £9.9 billion in March, the UK’s official budget watchdog said, in an analysis released ahead of her speech in error. The headroom figure was the most achieved in a British spending plan since March 2022 and well in excess of the median estimate of £15 billion from the banks surveyed by Bloomberg.

France exported the most electricity in at least two decades from July to October due to strong nuclear and renewables output. The figures underscore the improved performance of the French nuclear fleet, which supplies more than two-thirds of the country’s electricity and remains a cornerstone of Europe’s power system.

The extra budget plan underscores Takaichi’s challenge in balancing her pro-stimulus stance with a goal of staying fiscally responsible. Her package, unveiled last week, features the largest amount of fresh spending since pandemic restrictions were eased in Japan.

South Korea’s consumer confidence climbed to an eight-year high in November, supported by a trade agreement with the US that eased uncertainty over export prospects and by stronger-than-expected growth over the summer.

US consumers showed signs of fatigue leading up to the longest government shutdown, and their outlook has worsened ever since, sending a note of caution heading into the holiday-shopping season.

As US consumers remain anxious about job security and the cost of living, some are using seasonal sales — a period usually geared toward gift buying and the occasional personal indulgence — to restock on essentials. They’re also taking a more cautious approach to shopping; sticking to pre-planned purchases and buying gift cards instead of potentially unwanted presents.

Mexico’s annual inflation accelerated more than expected in early November after the central bank reiterated concerns of persistent price increases. Consumer prices rose 3.61% in the first two weeks of November compared to the same period last year.

Israel lowered interest rates following a ceasefire in Gaza, though the central bank signaled a cautious approach toward future cuts in face of criticism from the finance minister that it’s not easing fast enough.

India wants to boost trade with Mexico in software, pharmaceuticals and IT, its top Mexican diplomat said, while also hoping President Claudia Sheinbaum will exempt its exports from tariffs she’s proposed on a range of Asian goods.

Until this year, only a handful of cities in China allowed schools to go on a break each fall. But in recent months, at least 27 others have joined the list, with more possibly on the way. By freeing up time away from classes, authorities are pulling on a new lever in their quest to get households to spend more, and at little cost to cash-strapped local budgets.

Nigeria, Sri Lanka, South Korea and Kazakhstan held interest rates steady. In addition to Israel, Ghana, Lesotho, New Zealand and Guatemala also cut rates.