Sterling’s week begins on shaky ground as investors grow cautious about the upcoming UK Autumn Budget. The pound has fallen to a two-month low, but the underlying issue is that companies are hesitant to invest due to uncertainty about fiscal direction.
The latest business activity survey from the British Chambers of Commerce showed little improvement, with many firms expecting economic activity to contract due to lingering inflation and tax pressures. This pessimism may be overstated, but it reflects a broader corporate hesitation to commit to investment until clearer guidance is provided.
In contrast, Europe has found calm with Sébastien Lecornu’s return to the French government easing tensions in Paris and boosting confidence in France’s budgetary path. The euro has regained its traditional role as a counterweight to the dollar during times of geopolitical strain.
This week will bring some clarity to the market as UK and Eurozone data releases provide a glimpse into inflation pressures and underlying economic health. Germany’s Harmonised Index of Consumer Prices will be closely watched, while the UK’s employment data will serve as a barometer for economic well-being.
Source: https://www.directorstalkinterviews.com/markets-brace-for-a-testing-week-as-investors-await-fiscal-clarity/4121221041