UK Economics

1. On 26 September the rating agencies S&P and Moody’s both downgraded Thames Water’s credit rating by five levels to the equivalent of CCC+. The embattled firm has 11 days to refinance £530mn of debt or risk government renationalisation.
2. The Department for Transport has commissioned a review into the HS2 project, which may lead to HS2 Ltd being brought under the direct control of the department. HS2 Ltd, currently an arms-length body, has struggled to keep costs down in the absence of any direct ministerial oversight. 
3. Ahead of the next budget due 30 October, Keir Starmer has signalled his intention to boost capital spending. Speaking at the UN General Assembly this week, he stated “I’ve always thought that we should borrow to invest”, though adding that “Borrowing and public investment have to come alongside private investment, to be a catalyst for it.”
4. The Bank of England’s decision to cut interest rates slower than its US and European counterparts has attracted hot money flows to the UK, boosting the Pound. Since the start of this year Sterling has gained over 5% against the Dollar and 4% against the Euro.

World Economics

1. It is now predicted that the European Central Bank will cut interest rates by 0.25% in October, following weak inflation data from France and Spain and a sharp drop in the Eurozone Purchasing Managers’ Index (PMI). The ECB had previously been expected to wait until December for another rate cut. 
2. The Federal Reserve’s preferred inflation measure, the personal consumption expenditures (PCE) price index, dropped to 2.2% in August, lower than expected. This decline supports predictions that the Fed may cut interest rates again in November following last week’s cut of 0.5%.
3. EU paint manufacturers are urging a reconsideration of anti-dumping tariffs of up to 39.7% on Chinese titanium dioxide, warning that the duties could lead to factory closures, job losses, and production moving outside the bloc. Smaller producers may face bankruptcy, and larger ones such as PPG claim the duties would harm their competitiveness.
4. Argentina’s poverty rate has surged to 52.9% under President Javier Milei’s austerity measures, marking the highest level in two decades. The increase, from 41.7% in 2023, means an additional 3.4 million people have fallen into poverty this year.

UK Politics

1. On 25 September delegates to the Labour Party conference passed a motion condemning the government’s decision to introduce means-testing for winter fuel payments. While non-binding, the vote nonetheless represents a major humiliation for the government.
2. In another blow to Keir Starmer, Labour MP Rosie Duffield resigned from her party on 28 September. She stated that her decision was influenced by the recent gifts scandal as well as the government’s decision to scrap winter fuel payments and maintain the two-child benefit cap.
3. On 27 September the prime minister met Donald Trump in New York for the first time. Starmer stated that the meeting in Trump Tower was “really to establish a relationship” with the man who may return to the White House in November. 
4. With the Conservative party conference in full swing, leadership hopeful Kemi Badenoch stated on 29 September that statutory maternity pay has “gone too far”. The comment has sparked controversy, both in the party and the wider public.

World Politics

1. World leaders convened in New York City throughout the week of 23 September for the 79th session of the United Nations General Assembly (UNGA). The agenda for this year’s session was primarily centred around stemming wars in Ukraine, Gaza and Sudan.
2. On 26 September, New York City Mayor Eric Adams was indicted on five federal charges related to wire fraud, bribery, and conspiracy among other allegations. Mr Adams’ alleged illegal actions date back to 2014. Mr Adams has repeatedly denied these allegations publicly.
3. On 23 September, the Israel Defense Forces (IDF) launched an aerial campaign in Lebanon, marking the country’s deadliest day in over a decade. Among those killed include Hezbollah (Lebanon-based Islamic militant group) leader Hasan Nasrallah.
4. After his comments on an adult film site were uncovered, North Carolina Republican gubernatorial nominee Mark Robinson’s campaign plunged into further chaos with the candidate having burned his hand on an exhaust pipe during a campaign event on 27 September. Mr Robinson, who is now being treated for second-degree burns, is behind in most polls against his Democrat counterpart Josh Stein by the largest margin since the start of the year.

Written by Shreyas Veturi, Keshav Hajarnavis, Edgar Brown