Take Two: US taps oil reserves to cool prices; UK Prime Minister resigns
- 24 October 2022 (3 min read)
What do you need to know?
In a bid to rein in gasoline prices and stabilise markets, the US will release 15 million barrels of oil from its emergency stockpile, the Strategic Petroleum Reserve (SPR), President Joe Biden announced last week. This is part of a larger plan to release 180 million barrels by November, which has left the SPR at a 38-year low. Meanwhile, US factory output in September surpassed market expectations – with both industrial and manufacturing production 0.4% higher than the previous month. The Federal Reserve’s ‘Beige Book’ which collects anecdotal evidence on economic conditions also noted inflation pressures had eased somewhat and are expected to continue to do so.
Around the world
UK Prime Minister Liz Truss has stepped down after just 45 days in office – the shortest premiership, in the country’s history. Under her leadership, tax cuts announced in September triggered a re-pricing of sterling and UK government debt, as well as the removal of the Chancellor, followed by a major policy U-turn where most of the tax cuts were reversed. Her resignation has prompted a snap leadership contest to be concluded by Friday. Meanwhile, UK annual inflation was above expectations at 10.1% in September from August’s 9.9%, its fastest rate in 40 years. Elsewhere Eurozone annual inflation was revised down slightly to 9.9% for September from the 10% flash estimate, though still a considerable jump from August’s 9.1% rise.
Figure in focus: Less than 1%
Carbon dioxide (CO₂) emissions from fossil fuel combustion are expected to increase by less than 1% this year, according to the International Energy Agency (IEA). The agency also announced that CO₂ emissions are on track to rise by less than 300 million tonnes in 2022, after having jumped nearly two billion tonnes the previous year amidst a rapid economic rebound. The IEA suggests these figures reflect the major global expansion in renewable energy and electric vehicles this year, which ultimately overshadowed rising coal demand.
Words of wisdom: National Congress
A five-yearly conference which is arguably the most important meeting of the Chinese Communist Party. The event typically witnesses the announcement of key appointments and promotions as well as an outline for the next five-year political cycle. This year’s 20th National Congress ran from 16-22 October and was attended by around 2,300 senior party members – with President Xi Jinping’s election as party leader for an unprecedented third term long seen as an inevitability. Third quarter (Q3) GDP figures, due to be released last Tuesday, were delayed due to the event – amid speculation that the data would show weak growth.
What’s coming up
Flash Purchasing Managers’ Indices covering the Eurozone, the US and UK are reported on Monday, when China’s rescheduled Q3 GDP data is expected. On Wednesday the Bank of Canada meets to decide on interest rates – while the European Central Bank holds its own monetary policy meeting on Thursday, when an advance estimate of US Q3 GDP is also published. On Friday the Bank of Japan announces its interest rate decision and a spate of Eurozone opinion measures are released including the economic, services and industrial sentiment indices, alongside the latest consumer confidence measure.
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