Chancellor Rishi Sunak, brought us his second Budget of the year last month, against a backdrop of rising energy prices and supply chain issues impacting economies worldwide. 

Meanwhile, in China, the price of coal was rocketing, factory gate prices reached their highest level for twenty-six years, and the country missed all its key economic targets for the third quarter.

Growth for the July to September period slumped to two per cent in the US, and the German government sharply cut its growth forecast for the year, citing supply bottlenecks and high energy prices. 

There was plenty of political unrest in the month. Tension between China and Taiwan was described as the worst in forty years, with Chinese leader Xi Jinping, issuing a thinly veiled keep off message, as he described plans for reunification as an entirely internal matter. 

China fired a hypersonic missile round the world, in a move which appears to have taken the US completely by surprise, while North Korea sent a ballistic missile into the sea off Japan. Meanwhile, US President Joe Biden told new Japanese Prime Minister Fumio Kishida, that the US would defend the disputed Senkaku Islands in the event of an attack by China. The islands, which are uninhabited,are currently controlled by Japan but claimed by both China and Taiwan. 

The month did end with some semblance of global harmony, as world leaders at the G20 summit in Rome endorsed a deal on a global minimum corporation tax rate of fifteen per cent, which will be enforced from 2023. 


As noted above, Rishi Sunak delivered his second Budget speech of the year on Wednesday October 27th. He committed himself to an extra £150 billion of spending, funded partly by higher taxation. Despite this, he acknowledged his own dislike of higher taxes and made a pledge to reduce taxation in the future. 

He sat down with Conservative backbenchers enthusiastically waving their order papers, but the Budget split opinion on all sides of the political spectrum. The left, described it as a bankers’ benefit, while the right criticised what it saw as excessive spending and taxation. 

The Institute of Fiscal Studies, made it very clear that the tax burden would continue to increase. Looking further ahead, they saw little increase in household disposable income, which would be almost stagnant over the next five years, growing by just 0.8 per cent each year. 

Many business groups criticised the Budget, with Tony Danker of the Confederation of British Industry (CBI), saying that the Budget did not go far enough to deliver the high investment, high productivity economy, the Government wants. 

The month opened with the news that business confidence had declined in September, as supply chain problems, rising energy costs and the shortage of fuel, all combined to drive up prices. 

However, figures showed that the economy had grown by 0.4 per cent in August, as more people ate out, went on holiday and attended music festivals. 

In addition, government borrowing fell in September. At £21.8 billion, it was the second highest September figure on record, but was £7 billion less than in September 2020. Inflation in September dipped slightly to 3.1 per cent from the 3.2 per cent recorded in August, although the relief may only be temporary. 

Huw Pill, the Bank of England’s new chief economist, warned that inflation is likely to hit, or surpass, five per cent early next year. The food and drink industry added weight to the argument, with Federation boss Ian Wright, telling MPs that inflation is between fourteen per cent and eighteen per cent for hospitality firms, and that it will inevitably lead to price rises for consumers. 

In the employment market, there were plenty of stories of companies taking on new staff in the month, with Addison Lee, London’s leading private hire firm, looking to take on one thousand new drivers. The Recruitment and Employment Confederation, reported in the middle of October that there were now almost 2.3 million job vacancies, with more than six hundred thousand being added since the last week of August. The growth has been spread across the country, said the REC, making competition for staff ever more fierce. 

The month ended with two pieces of good news on the jobs front, both centred on the north east. Envision, the Chinese firm behind the Sunderland gigafactory, announced a huge expansion, with the factory’s capacity increasing sixfold, as it looks to bolster its electric battery division. Meanwhile, Saudi chemicals giant, Sabic, announced that it was to invest nearly £1 billion at its Teesside plant, in a move that will create and protect one thousand jobs. 

The FTSE-100 index of leading shares had a good month, rising two per cent to end October at 7,238. The pound was up by a similar amount against the dollar, closing the month trading at $1.3689. 


We mentioned the twin threats of power shortages and inflation in the introduction, and they were certainly in evidence in Europe. 

During October, inflation in the Eurozone soared to its highest level in thirteen years, with figures from September showing inflation had risen to 3.4 per cent from two per cent in the previous month, the highest figure since September 2008. 

In Germany, the government cut its growth forecast for the year from 3.5 per cent to 2.6 per cent. Economy Minister Peter Altmaier, cited energy costs and supply chain problems, especially for semiconductors, as the reason, but predicted the economy would bounce back in 2022. 

There was more bad news for the car industry, which is now threatened by a shortage of magnesium. Europe imports ninety-five per cent of its magnesium, which is used to strengthen aluminium, from China and, according to Bloomberg, could run out by the end of November, threatening millions of jobs in sectors from the car industry, to aerospace and defence. 

However, Volvo, now owned by China’s Zhejiang Geely Holding Group, saw its shares jump from £4.50 to £5.10 on its £13 billion debut on the Stockholm stock exchange. The company had hoped to raise £1.7 billion from the listing, as it gears up to become fully electric by 2030.

On the political stage, disagreements between the EU and Poland over whose law takes precedence continued. Social Democrat Olaf Scholz, remains the favourite to succeed Angela Merkel as German Chancellor, and a new name was whispered for next year’s French Presidential election. Right-wing commentator and essayist Éric Zemmour has not yet officially entered the race, but a recent poll put him ahead of Marine Le Pen, as the likely challenger to President Macron. 

Figures for the third quarter, showed growth of 2.2 per cent in the nineteen countries that make up the Eurozone. This was ahead of expectations, but inevitably gave rise to worries about further inflation, which was expected to hit four per cent for October. 

The region’s major stock markets were, however, in an optimistic mood. Germany’s DAX index shrugged off any worries with a three per cent rise to 15,689, while the French stock market did even better, gaining five per cent in the month to close at 6,830. 


As we reported last month, September was a poor month for US stock markets, with the Dow Jones index falling four per cent and the S&P 500 down five per cent in what was the markets’ worst month since March 2020. 

October saw them regain the lost ground, in a month which brought us the third quarter figures from the major tech companies. While they reported some very large numbers, third quarter growth for the wider US economy was down to just two per cent, from 6.7 per cent in the previous quarter in the face of supply chain problems, rising inflation and further Covid restrictions in some states. 

The month started with the news that the US had added a disappointing one hundred and ninety-four jobs in September, although the unemployment rate fell from 5.2 per cent in August to 4.8 per cent. There are currently 7.7 million people out of work, which is a significantly higher number than before the pandemic. 

Electric car maker, Tesla, revealed record quarterly sales and profits for the third quarter, with revenues rising to $13.76 billion (£10.05 billion), as it sold more than two hundred and forty thousand cars, with profits rising to $1.6 billion (£1.18 billion). A deal to sell one hundred thousand to Hertz saw the share price leap and made Tesla the fifth company to reach a $1 trillion (£730 billion) valuation. 

Google has already reached that landmark and announced a third straight quarter of record profits. Revenues for the July to September period, were ahead of Wall Street expectations at $65.5 billion (£47.8 billion), with the company reporting a net profit of $18.9 billion (£13.8 billion). 

Facebook posted profits of $9 billion (£6.6 billion) for the period, although the row over leaked documents and unethical behaviour from the company continued. Facebook announced that henceforth, its holding company would be known as Meta.

The only one of the tech giants to disappoint the market was Apple, whose shares fell five per cent after its third quarter earnings. Despite being a record and twenty-nine per cent up on last year, they were around a billion dollars short of expectations. Boss Tim Cook, blamed supply chain issues and the continuing shortage of semiconductor chips. 

The fall in Apple’s share price was good news for fans of Microsoft, which duly reclaimed the title of the world’s most valuable company. 

US stock markets more than made up the ground lost in September, with the Dow Jones index climbing six per cent to close October at 35,820, while the more broadly based S&P 500 index was up seven per cent to 4,605. 

Far East 

Chinese property giant, Evergrande, has hundreds of billions of dollars of debt, and reportedly owes money to one-hundred-and-seventy-one domestic banks and one-hundred-and-twenty-one other financial firms. September ended with the company missing a £35 million interest payment to foreign bondholders, the second missed payment in a week, and throughout the month, the company’s share price lurched up and down, depending on whether a payment had been made or missed. 

By the end of the month, the company chairman was apparently putting his own house up as collateral, and as we reported in October, bankers, Union Bank of Switzerland (UBS), estimate there are ten property developers in China, with combined debt nearly three times the size of Evergrande. 

Meanwhile, the price of coal had reached a record high in China by the middle of October, increasing by ten per cent in one day, as flooding hit one of the country’s key mining areas. The National Development and Reform Commission, said that in view of the shortages, the price of electricity generated by coal would be allowed to rise and fall by twenty per cent, compared to a previous upside limit of ten per cent and a lower limit of fifteen per cent. 

Last month saw another surge in factory gate prices. In September, they grew at their fastest rate for twenty-six years, adding to worries about both local and global inflation.

 Unsurprisingly, Goldman Sachs, which a month ago said that China would have zero growth in the third quarter, cut its growth forecast for the year from an already low 5.8 per cent, to just 5.4 per cent. 

Official figures confirmed that the economy grew by 0.2 per cent in the third quarter, compared to the previous three months. Year on year, it was up by 4.9 per cent compared to the third quarter in 2020, against a generally expected figure of five per cent. Perhaps more worryingly, industrial output in the third quarter was up by just 3.1 per cent against a forecast of 3.8 per cent. 

The Hongkong and Shanghai Banking Corporation Limited (HSBC), exceeded expectations for profits in the third quarter, boosted by the release of reserves, that had been set aside to cope with expected pandemic related defaults. Analysts had forecast profits to come in at $3.78 billion (£2.76 billion). HSBC beat that figure, posting pre tax profits for the three months of $5.4 billion (£3.94 billion).

The region’s stock markets, however, largely took their cue from worries about inflation and energy prices, with the exception of Hong Kong’s Hang Seng index, which rose three per cent to 25,377. China’s Shanghai Composite index fell one per cent to 3,547, while the Japanese stock market was down two per cent at 28,893. South Korea was the worst performer, with the market there down three per cent in the month to 2,971. 

Emerging Markets 

After El Salvador became the first country in the world to accept Bitcoin as legal tender, the country’s President took to Twitter in October, to announce that it had begun mining Bitcoin using power harnessed from a volcano. President Nayib Bukele, confirmed that the project had started by generating 0.00599179 of a Bitcoin, worth approximately £208. 

India, meanwhile, found itself on the brink of an unprecedented power crisis, with more than half the country’s one hundred and thirty-five coal-fired plants running on fumes, as coal stocks ran critically low. Seven per cent of India’s electricity is generated using coal, with the shortage threatening to derail the country’s economic recovery from the pandemic. 

Like many countries, demand for power has picked up sharply in India, as the country has come out of the pandemic, with consumption in the last two months up seventeen per cent on the same period in 2019. India is the world’s second largest importer of coal, so will be badly hit by global price increases. 

For now, this was not reflected on the Indian stock market, which had a relatively quiet month, closing October unchanged in percentage terms at 59,307. The Russian market gained one per cent to end at 4,150, but it was a poor month in Brazil, where the stock market fell seven per cent to finish at 103,501.