UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Growth and guessing'
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Sep 30, 2025 The UK sees a surprising boost in GDP, officially ranking as the fastest growing G7 economy. With consumers now saving more, there's potential for future spending, despite inflation pressures from retailers. Meanwhile, early inflation data from the Eurozone is on the horizon, but the market remains unfazed. The threat of a US government shutdown looms, casting doubt on crucial data releases and potentially allowing unnoticed price hikes. Lastly, proposed tariffs on furniture hint at shifting consumer behavior.
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UK Growth Upgraded By Investment
- The UK’s final Q2 GDP revision was upward, making it the fastest-growing G7 economy year-to-date.
- Stronger investment lifted growth while rising real disposable income allowed the savings rate to tick up.
Consumers Have Room To Spend
- Rising real disposable income has allowed households to increase their savings rate a little.
- That gives households resources to consume later despite retailers' attempts at profit-led inflation.
Retail Prices Up Slightly In September
- The British Retail Consortium showed a small rise in shop price inflation in September.
- Less non-food deflation and timing of back-to-school discounting complicated seasonal patterns.