As an exercise in expectations management, the Labour government’s trailing of its October Budget has been impressive.

Rhetoric around what people should come to expect at the end of next month has been gloomier than a wet Tuesday in February. In our Personal Finance section this week Laith Khalaf explores whether material limits could be placed on pensions tax relief, for instance.

As Panmure Liberum’s chief economist Simon French notes, the talking-down of the UK economy could end up being a self-fulfilling prophecy.

‘In recent meetings with companies and investors I have picked up a palpable fear of what is now coming at the 30 October Budget. Government messaging designed to achieve a political goal now risks having an economic blowback. While most businesses acknowledge the need to fund public services correctly – and that this can be growth-enhancing – the job becomes decisively harder if consumers spend less and businesses pull back on investing. The hope is the mood music changes the other side of the Budget, and someone in the Treasury dusts off their D:REAM LP in time for the Christmas Party.’

The reference to Christmas is apt as we are approaching the so-called ‘golden quarter’ when consumer-facing businesses make a good chunk of their annual revenue.

If the downbeat commentary from chancellor Rachel Reeves and prime minister Keir Starmer means people scale back their festive spending then industries like retail and travel could take an unwelcome hit.

More positively, consumer demand could be stoked by falling interest rates. Numbers from KPMG and the Recruitment and Employment Confederation show a cooling UK jobs market in August which would allow the Bank of England room to countenance further cuts to rates when it next meets on 19 September.

At the end of August this column discussed oil prices and their inherent unpredictability, a theme which has been borne out by the events of the intervening period.

Prices, which had moved higher on Libyan outages and Middle East tensions, subsequently plunged to 30-year-lows amid concerns about the health of the global economy and have rebounded again on expectations of storm disruption to operations on the US Gulf Coast.

Just two weeks after cutting its oil price forecast for the fourth quarter to $80 per barrel, Morgan Stanley has trimmed this further to $75. Concerns about Chinese demand have persisted for some time but now those concerns have spread to the US after disappointing non-farm payrolls data, a topic which Martin Gamble addresses in this week’s news section.

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