Hurricanes and the enormous strike at Boeing were always going to be temporary factors in the US economy, but there are nevertheless signs of a “slowing trend”, according to economists.

Samuel Tombs, chief US economist at Pantheon Macroeconomics, a consultancy, said the data “bolsters the case” for the Federal Reserve to lower interest rates at both its November and December meetings. After that, it depends on what happens on Tuesday...

Tombs said:

The muted rise in October payrolls is not merely due to strikes and the recent hurricanes.

A further slowing in the trend looks likely given that hiring intentions of small businesses remain depressed, large businesses still face a rise in their borrowing costs as low-rate corporate bonds mature, and job openings in the health and education sector have fallen.

August and September job gains were revised down by 112,000 jobs, and growth in job numbers slowed.

Preston Caldwell, chief US economist at Morningstar, said:

Even setting aside the October data, where the impact of temporary distortions is unknown, today’s jobs report was a bit bearish.

The data does point to an ongoing downtrend in job growth. […] There is nothing in the overall assemblage of labour market data to dissuade the Fed from cutting in next week’s November meeting and to loosen policy further over the next year.

The data overall points to a job market that has shed all of its post-pandemic tightness and excesses, and the data suggests enough downside risk to warrant nipping in the bud with monetary easing.

In other business news today:

• The UK gilt market appeared to stablise after yields jumped on Thursday.

• HSBC chairman Mark Tucker gave his support to Rachel Reeves’s budget.

• The UK manufacturing industry fell into contraction in October as companies paused investments ahead of the budget, according to the closely followed purchasing managers’ index (PMI).

• Rating agencies gave their UK budget verdicts. Moody’s said the UK government’s increased borrowing will give an “additional challenge” to the public finances, while S&P Global said the UK government will be “constrained” by its debt load.

• UK house price growth slowed in October ahead of Wednesday’s budget, surprising economists who had expected faster increases, according to one of the key measures collected by a lender.

• Oil prices rose after reports that Iran is preparing an attack on Israel.

You can continue to follow our live coverage from around the world:

In the UK, the Lib Dems say the budget could create a ‘lost generation’ of farmers

In the US, Kamala Harris and Donald Trump campaign in key swing states in final stretch of race

In the Middle East, Israeli strikes kill 25 in Gaza and 13 in Lebanon

Thank you for following this UK budget week. Please do join us next week as we strap in for the US election, and its fallout on financial markets. JJ

The response from the business lobby to the UK budget was fairly negative, but criticism of the Labour government has not been universal.

Chancellor Rachel Reeves has gained the backing of some senior bankers – perhaps cognisant that Labour is likely to be in power for at least five years.

Mark Tucker, chairman of HSBC, said:

This is a budget which lays the foundations for necessary investment within a framework of clear fiscal rules. The overall package strikes a balance between tax, spending and borrowing to finance public services, alongside a focus on delivering economic growth.

Patrick Thomson, JP Morgan’s chief executive of asset management in EMEA, said:

The market reaction compared to the Truss mini-budget has been relatively muted and should count as a success considering the ambition of the Budget. It was helpful that there were few surprises, given that it was so well telegraphed ahead of time.

Having raised taxes for much-needed investment in public infrastructure and services, the market will be waiting to see that the money is spent wisely in actually fixing any underlying problems in the economy to have long term impact. Ultimately, we all want to see how this translates into growth, and so the City will look to the forthcoming Mansion House speech for further detail on the proposed investments.

Back in the UK, the RMT union has suspended tube strikes due to start today after what it called a “significantly improved offer” from Transport for London.

Engineering staff represented by RMT were due to stop work for 24 hours from 6pm today.

However, the separate Aslef union has not called off its action. Train operators and managerial employees are due to strike on 7 and 12 November.

An RMT spokesperson said:

Following intense negotiations with London Underground management and a significantly improved offer, we have suspended the strikes scheduled to start this evening.

London Underground have sensibly abandoned their proposed changes to pay structures which now means all our members will receive the same value in any pay award.

Further discussions will take place next week regarding the pay offer but progress has been made which would not have been possible without the fortitude and industrial strength of our 10,000 members on London Underground.

*This post has been updated to reflect the fact that Aslef has not called off its strike action.

The US economy added far fewer jobs than expected in October, in a shock reading that will raise questions about its momentum days before the presidential election.

Only 12,000 jobs were added in the month, according to the Bureau of Labor Statistics, far below economists expectations of 113,000, and the 254,000 in September.

The UK manufacturing industry fell into contraction in October as companies paused investments ahead of the budget, according to the closely followed purchasing managers’ index (PMI).

The final reading for British manufacturing dropped to 49.9 points in October, according to S&P Global, below the 50 index level that marks a contraction. The initial “flash” reading had been 50.3.

It was the first time since April that manufacturing activity had contracted, S&P said.

Rob Dobson, director at S&P Global Market Intelligence, said:

UK manufacturing started the final quarter of the year on an uncertain footing amid speculation on government policies ahead of the Budget, which was widely reported to have led to a wait-and-see approach on investment and spending.

This domestic headwind, combined with an ongoing loss of export business, led to the first outright contraction in new work intakes since April. Output growth came close to stalling as a result.

Another of the big three rating agencies has published its verdict on the UK budget: S&P Global Ratings said that the UK’s fiscal position is “constrained” – but it also said that public investments – particularly in the health service – could create a “more business-friendly environment”.

The UK faces “elevated budgetary deficits and net general government debt level”, S&P said – although it did not raise its forecasts for budget deficits because it had already taken into account “lingering public spending pressures”.

Chancellor Rachel Reeves’s new fiscal rules gained the unusual backing of the International Monetary Fund this week, because they allow for increased investment. However, S&P said that the rules presented “mixed messages” because they allowed for greater spending, but also that they are more credible on cutting future deficits because they require debt to be government debt to falling within three years. (Previous rules had a five-year timeframe, which meant governments could up load notional tax rises in the future, knowing they were unlikely to have to deal with it themselves.)

The key test of success for Reeves will be growing the economy, S&P said:

The front-loading of spending will mechanically boost growth in the short term, but it’s too early to tell how much this will add to potential output in the long term. On the positive side, investments in infrastructure and planning reforms should create a more business-friendly environment; an improved health service should help bring people back to work as current inactivity remains mainly linked to people who are off sick; and education and childcare investments should improve workers’ skills in the long term. Nonetheless, reaping those potential benefits will also depend on whether the spending is deployed in an effective way.

S&P underlined that Reeves and Starmer have gambled on higher spending generating increased growth. If that does not happen it could prove tricky for the UK:

A hypothetical scenario in which public spending is permanently higher but the quality and accessibility of public services still doesn’t improve enough, could further complicate policy trade-offs in the future. Conversely, a faster improvement in public services could yield greater dividends in terms of lower future pressures and positive growth repercussions.

The UK government’s increased borrowing will give an “additional challenge” to the public finances, according to influential rating agency Moody’s.

UK gilt yields, effectively the price at which the government can borrow, rose to their highest level this year on Thursday afternoon as markets responded to Rachel Reeves’s budget – the first by a Labour government in 14 years. Investors were responding particularly to the prospect of about £28bn in extra borrowing.

Moody’s said that the budget would not do much to boost UK economic growth, and that there was only a limited buffer if the country faces further financial shocks, in a further sign of the wariness of financial markets towards the government’s plans.

In a note sent to investors, reported by the Financial Times, Moody’s said:

In our view, the increase in borrowing, which is in part supported by a new measure of debt under the fiscal framework, will pose an additional challenge for what are already difficult fiscal consolidation prospects. […]

Furthermore, the extent to which new investment spending can raise growth potential will be limited unless structural constraints are durably addressed which will prove difficult.

Moody’s is one of the three major ratings agencies, alongside S&P and Fitch. Their economists are not privy to any special information or insight on sovereign debt, but their assessments tend to be influential among bond investors

Changes to stamp duty by Rachel Reeves in the budget mean we should expect a rush of UK property transactions in the new year until the end of March, according to Nationwide.

That will probably be followed by a period with fewer transactions in the months afterwards.

The chancellor’s decision to remove the temporary increase to the nil rate for stamp duty next April could spark a rush to complete purchases before the changes.

In September 2022, the government temporarily increased the nil rate of stamp duty, the amount before you have to start paying stamp duty on a purchase, for homebuyers, raising the nil rate for first-time buyers from £300,000 to £450,000, and for those buying an additional home from £125,000 to £250,000.

Robert Gardner, Nationwide’s chief economist, said:

The main impact of the stamp duty changes is likely to be on the timing of property transactions, as purchasers aim to ensure their house purchases complete before the tax change takes effect.

This will lead to a jump in transactions in the first three months of 2025 (especially March), and a corresponding period of weakness in the following three to six months, as occurred in the wake of previous stamp duty changes.

Good morning, and welcome to our live coverage of business, economics and financial markets.

UK house price growth slowed in October ahead of Wednesday’s budget, surprising economists who had expected faster increases, according to one of the key measures collected by a lender.

House prices grew by 0.1% in October, according to the Nationwide building society. That was less than the 0.3% rate that economists polled by Reuters.

The annual rate of growth slowed from 3.2% in September to 2.4% in October, below the 2.8% expected by economists.

Robert Gardner, Nationwide’s chief economist, said:

Housing market activity has remained relatively resilient in recent months, with the number of mortgage approvals approaching the levels seen pre-pandemic, despite the significantly higher interest rate environment.

UK debt yields revisit year high after budget

UK bond yields once more touched their highest point this year on Friday, as investors continued to digest the implications of the first Labour budget in 14 years.

The yield – effectively the UK government’s borrowing cost – on the benchmark 10-year bond reached 4.526% in global trading on Friday, matching the level hit on Thursday in the aftermath of Rachel Reeves’s budget statement as investors predicted a slower pace of interest rate cuts from the Bank of England. Since then it has fallen back slightly to 4.456%.

Scrutiny of bond market movements has been particularly intense after the budget because of the large borrowing set out by Reeves, alongside major tax increases. However, while there has been a noticeable reaction in the market for UK government bonds, also known as gilts, it has not so far been comparable to the turmoil following the budget of Liz Truss and Kwasi Kwarteng in 2022.

The below chart shows the UK 10-year gilt yield over the last three months: yields (which move inversely to prices) have risen appreciably, but the post-budget movements have not been dramatic.

We will update throughout the day on movements.

The agenda

• 9:30am GMT: S&P Global UK manufacturing purchasing managers’ index (October; final reading; previous: 51.5; consensus: 50.3)

• 12:30pm GMT: US non-farm payrolls (October: prev.: 254,000 new jobs; cons.: 113,000)

• 12:30pm GMT: US unemployment (October: prev.: 4.1%; cons.: 4.1%)