The week ahead 10 November 2025 - Bank signals December rate cut
What to watch out for in the UK economy and property market this week.
While the Treasury continues to manage downwards public expectations on what is coming in the Budget, last week saw some good news on interest rates. The Bank of England Monetary Policy Committee (MPC) left the Base Rate unchanged at its meeting, but the vote was a close-run thing. Five rate setters voted for no change, but four wanted a cut of 25 bps. The MPC, in the statement that accompanied the announcement, said they believe inflation has now peaked. At the subsequent press conference, Governor Andrew Bailey’s comments were leaning towards the dovish side, and all this has been taken by the markets as a signal that the Base Rate will be cut next month by 25 bps. Our full analysis of the interest rate decision can be found here.
Last week also saw a significant upwards revision for the October reading of the UK PMI composite index, a measure of business activity. The convention of the index is that a reading of over 50 indicates growth in the commercial side of the economy. The early draft figure for October was 51.1, but in the final report, it rose to 52.2. The September number was just 50.1, so the revised data points to a significant improvement in business activity in October, despite all the gloomy economic commentary that was circulating last month. Separately, EY Item Club increased their forecast for UK GDP growth this year to 1.5%, up from 1.0% previously.
Stock markets remained volatile last week, as concerns re-emerged over the valuation of tech firms, particularly those at the forefront of the Artificial Intelligence boom. The first four days of trading in November saw the US S&P 500 share index fall by -1.8%, and the tech-oriented Nasdaq 100 dropped by -2.8%. Over the same period, the UK FTSE 100 managed a marginal rise of 0.2%, although at the time of writing on Friday afternoon, it was falling.
This week will see figures released on the UK labour market and GDP growth.
In our opinion, the employment figures will probably confirm that the labour market remains sluggish. Most business surveys show firms are reluctant to take on staff currently, given the uncertain economic backdrop. However, the GDP figures should provide the Chancellor with some positive news as she prepares her Budget, as the indicators we have so far on Q3 point to continued output growth over the summer.
This week's figures
Tuesday 11 November
UK Unemployment Rate, September
4.8% previous
4.8% forecast
While business surveys point to improved confidence lately, recruitment is typically highlighted as an area of ongoing caution. We are forecasting no change in the unemployment rate.
Tuesday 11 November
Euro Area ZEW Economic Sentiment Index, November
22.7 previous
22.9 forecast
The latest GDP figures reported the Euro Area economy strengthened modestly in Q3, and with interest rates low, we believe momentum probably continued into Q4. We are predicting a small increase in the ZEW index.
Wednesday 12 November
UK GDP Growth, q-on-q, Q3 2025
0.3% previous
0.3% forecast
Business surveys for Q3 pointed to continued growth, but at a subdued pace. Plus, the retail sales volume figures for Q3 were robust. Overall, we are expecting GDP growth of a similar level to that seen in the previous quarter.
