18/10/2025 by Tony Redondo
According to the United Nations, India leads both the births and deaths charts with 23 million births and 10 million deaths, resulting in a net increase of 13 million. China ranks second for births with 9 million but experienced 12 million deaths for a net decline of 3 million. Nigeria comes in third with 8 million births and 3 million deaths, a net gain of 5 million. Pakistan follows with a net increase of 5 million, while the Democratic Republic of Congo ranks fifth with a net increase of 4 million. The USA achieves a net increase of 1 million. Notably, the UK, France, Italy, and Japan do not appear in the top 25 countries for births, but all four rank among the top 25 for deaths.
These figures reflect a fundamental demographic shift characterized by aging populations in developed nations and continued population growth in developing countries. In the UK, USA, and EU, fertility rates have fallen below replacement levels, averaging around 1.5 to 1.7 children per woman, leading to aging societies where the proportion of people over 65 is steadily increasing. This demographic structure creates challenges for pension systems and healthcare provision, as fewer working-age people support more retirees. China faces an acute demographic crisis following decades of its one-child policy; the population is now declining, with projections showing it could fall from 1.4 billion to under 800 million by 2100. Although the Chinese government has reversed population controls and introduced incentives, fertility rates remain stubbornly low, threatening economic growth and social stability.
In contrast, India and much of the Global South maintain younger population structures with higher fertility rates. India is on track to become the world’s most populous country, surpassing China, with a median age around 28 compared to over 37 in developed nations. This demographic dividend offers economic opportunities if coupled with job creation and education, but also poses challenges for infrastructure, housing, and resource management. India’s rapid urbanization is reshaping its economy and society, although the majority of its population still lives in rural areas.
The demographic divergence between regions carries profound geopolitical implications. Aging developed economies face labour shortages, increased dependency ratios, and fiscal pressures. Meanwhile, younger populations in India and parts of Africa represent both growing consumer markets and potential sources of migration pressure. China’s demographic collapse is unprecedented for a major power and may fundamentally alter its economic trajectory and global influence. These trends will reshape immigration patterns, labour markets, social policies, and international relations throughout the 21st century.
Currency Exchange Rates Update
The Pound was little changed last week against the Euro.
https://www.liverpoolecho.co.uk/travel/new-advice-spain-france-greece-32618224
Against the US Dollar, the Pound finished last week nearly 0.6% up to hit a 10-day high.
One of the world’s biggest FX dealers, Citi is forecasting the US Dollar will have a strong 2026 and outperform its currency peers. Citi expects the US “equity bubble to continue attracting inflows”, fuelling a Dollar rebound.
This week, the key economic data releases include:
Monday China GDP, Industrial Production & Retail Sales
UK Nationwide House Prices
Tuesday Canada CPI Inflation
Wednesday UK CPI Inflation (forecast to hit 4% from the current 3.8%)
Thursday Canada Retail Sales
EU Consumer confidence
Friday UK Retail sales & PMI Manufacturing
EU PMI
US CPI Inflation & Consumer sentiment (US inflation forecast to rise but not sufficiently to stop a Fed interest rate cut)
What’s in the news?
The latest IMF International Monetary Fund) World Economic Outlook for the UK makes grim reading. Economic growth is projected at around 1.3% in 2025, and 1.3% for 2026. Global trade frictions, rising borrowing costs, and weak productivity continue to cloud the outlook for the UK economy. The inflation picture equally grim with the UK projected to have the highest annual average inflation in the G7 economies in 2025 and 2026, at 3.4% and 2.5% respectively, and is expected to remain well above target for several more quarters. This limits the BoEs (Bank of England’s) room to cut UK interest rates further.
The IMF emphasises that the UK’s financial position is stable but remains stretched. Higher debt-servicing costs and slower revenue growth leave little room for fiscal manoeuvre. Any fiscal easing in the Autumn Budget will need to be carefully targeted to avoid reigniting inflation or undermining market confidence, putting Chancellor Rachel Reeves under intense pressure when she delivers her second Budget on 26 November.
The IMF is the second major forecaster to highlight the UK’s inflation problem after the OECD (Organisation for Economic Cooperation and Development) forecast the UK will suffer higher inflation than the G20 average.
UK
The ONS (Office for National Statistics) reported that the UK economy grew by 0.1% in August.
Ruth Gregory, deputy chief UK economist at Capital Economics, said, “The meagre rise in real GDP in August suggests growth is still being hampered by high interest rates, higher taxes and soft overseas activity. With business sentiment on the floor and employment still falling, we doubt growth will improve much in the fourth quarter.”
The Halifax reported that UK house prices fell by 0.3%. Experts warn that prices may continue to decline due to stagnant demand and uncertainty surrounding upcoming Budget announcements.
The BoE’s chief economist Huw Pill has renewed calls for interest rates to be cut at a “more cautious pace” in the next year, raising the odds that the Base Rate may be held at 4% for the foreseeable future.
Good news
UK 10-year gilt yields have fallen to three-month lows less than six weeks before the Budget.
Not so good news
UK 30-year gilt yields remain elevated at 5.31% and reached 5.518% on Wednesday, their highest level since 1998.
The respected think-tank, the IFS (Institute for Fiscal Studies) has warned Reeves that “directionless tinkering and half-baked fixes” risks wreaking havoc on the UK economy unless she breaks Labour manifesto commitments and introduces vast reforms to the wider tax system. With Reeves set to raise taxes by at least £30bn, IFS economists said Reeves should simplify the tax system, consider reforming property and council taxes, and take care with any mooted changes to capital gain taxes. Stronger tax compliance targets and policy design could also yield greater levels of revenue.
The NIESR (National Institute of Economic and Social Research), estimates the fiscal hole to be closer to £50bn, say the government should prioritise raising income tax over VAT to put the UK economy on a more stable footing.
https://bmmagazine.co.uk/in-business/budget-vat-attack-would-bludgeon-uk-consumers-and-businesses
The Co-op warned that 60,000 small shops and 150,000 jobs could be lost without business rates reform in the budget. Shirine Khoury-Haq, Co-op Group CEO, said, “As we approach a critical Autumn Budget, there’s a real danger that the voices of small shops and the communities they serve are not being heard.”
The UK’s finance chiefs are losing faith in Labour’s growth mission due to higher costs and believe the country is falling behind rivals as costs are stacking up and squeezing profit margins. Research by professional services giant, Deloitte shows 84% of CFO’s (Chief Financial Officers) expect operating costs to rise, prompting business leaders to take control of cash flows and that operating margins were expected to decline at 47% of firms, the highest reading since the second quarter of 2023. 25% of respondents said they would introduce new products or services, 12% would invest in new capital and 11% are looking to take over other companies.
The ONS reported that the UK unemployment rate has risen to a four-year high figure of 4.8%. The estimated number of vacancies in the UK fell by 9,000, marking the 39th consecutive period of job posting declines.
Retail spending slowed in September. Helen Dickinson, the chief executive of the BRC (British Retail Consortium), attributed the slowdown to a combination of “rising inflation and a potentially taxing Budget”.
David Solomon, the CEO of Goldman Sachs has warned Chancellor Rachel Reeves that an increase to the financial burden slapped on the banking sector would dent economic growth ambitions. In a private meeting with the Chancellor, Solomon said hitting the industry with higher taxes would dampen wider prospects for the country’s growth. UK Finance submitted a report ahead of last year’s budget showing the banking sector’s UK tax rate in 2024 sat at 45.8%, far higher than London’s European rivals like Amsterdam (42%), Frankfurt (38.6%) and Dublin (28.8%).
City broker Shore Capital has blasted the Treasury as incapable of creating economic growth. Describing Britain’s political leaders as “detached, ignorant, and selfish”, Shore Capital analysts Clive Black and David Hughes said “The Treasury is incapable of either creating the conditions for private capital to flourish or controlling Government expenditure, making for a never-ending debate on what taxes to increase. To be clear, the prime source of that UK food inflation is the policies of the British Government, and taxes on labour. No one pretends that running the UK is easy and no one can deny that the Tories left a dreadful legacy. A country tired of stupid incompetence just wanted some quiet capability, supposed grown-ups to stabilise matters… Alas, despite the rhetoric, things have been anything but quiet or capable. The government does not understand private capital”.
Rathbones, the investment management and wealth management services firm forecast that any Wealth tax introduced in next month’s budget would drive £100bn out of the UK economy. Oliver Jones, head of asset allocation at Rathbones, said, “There is clear evidence that a recurring wealth tax would be economically damaging to the UK”. Jones added a new levy would require annual valuations of “complex and illiquid assets” for thousands of individuals, which would be “costly to administer”.
The ICAEW (Institute of Chartered Accountants in England and Wales) said data showed 56% of businesses claim they would reduce headcount or introduce a recruitment freeze if taxes were raised at next month’s Budget. The survey also showed some 45% of firms claiming they would be prepared to raise prices to offset costs, which would go against Reeves’ ambition to curb inflation this year whilst 39% would cut investment, further damaging growth prospects.
USA
Monday is day 20 of the government shutdown with no end in sight. By Wednesday, it would be the second longest shutdown in the last 50 years.
In a speech, Federal Reserve chair Jerome Powell outlined the increasing complexity of policy making. Powell said the impact of tariffs is continuing to flow through into inflation. Powell warned the slower than expected flow-through means inflation might be more persistent. Powell also said the job market is weakening and falling job openings are likely to show up as job losses. Powell left the door open for further cuts. The Fed next meets on 29 November.
The EU
New European rules on instant bank transfers are now live and require all banks in the eurozone to offer this service 24 hours a day, seven days a week making transactions faster, more secure, and include automatic verification of the recipient before the money leaves the account. The measure applies to all banks, savings banks, and payment service providers that already offer standard SEPA bank transfers. The old limit of 100,000 euros per transfer has also been eliminated. Each institution can now set its own limits, depending on the customer profile or the channel used.
Bank of New York (BNY) expect talk of ECB (European Central Bank) interest rate cuts to increase in tempo before the year ends. The euro has been one of 2025’s better performing currencies, thanks in part to the ECB’s decision to end its interest rate cutting cycle ahead of other peer central banks. However, BNY thinks a deterioration in the Eurozone’s manufacturing sector will put rate cuts at the ECB back in the frame for the fourth quarter.
Eurozone industrial production fell 1.2% month-on-month in August, its lowest level since January, following a modest 0.3% rebound in July.
In Germany, wholesale prices rose 1.2% year-on-year in September, accelerating from 0.7% in August and marking the tenth consecutive month of gains. The rebound was driven largely by food and agricultural commodities. Germany’s ZEW survey broadly undershot expectations on both the current situation and expectations components, while sentiment for the broader euro area also deteriorated with October’s expectations reading lower than September’s. This sentiment data reinforces what hard indicators have already shown this month. The eurozone economy is grappling with stagflation.
Sébastien Lecornu, who resigned as French prime minister earlier this month before being reappointed four days later named the first cabinet of his new tenure. His previous attempt to appoint ministers prompted a broad parliamentary revolt and thus his resignation, making him the shortest-serving premier in France’s modern history. The new cabinet, containing many of the same figures as the last one, faces the same challenges: A minority government, and convincing a hostile parliament to pass an unpopular but economically necessary budget.
Spain’s grid operator called for urgent measures to stabilize the electricity network, after steep voltage swings raised fears of another blackout. Spain and Portugal were hit by a gigantic power outage in April, the worst European blackout in two decades. The incident was caused by variability in electricity demand and renewable output, which the grid operator could not predict. When the voltage swung outside safe levels, protective systems shut parts of the grid down, like a household fuse blowing. The explosion in renewable energy worldwide is changing energy systems, and grids are often failing to keep up.
Others
China September exports beat expectations with 8.3% growth in September and gathering pace again after slowing to a six-month low in August. Imports rose at the fastest pace since April 2024, up by 7.4% last month from a year ago.
Microsoft reportedly wants to pivot the majority of its hardware manufacturing outside of China next year, a sign of the growing fracture between the Western and Chinese technology sectors. It is not alone among American Big Tech firms with AWS set to move server production outside of China, while Google is trying to grow server-making capabilities in Thailand.
In Australia, the unemployment rate rose from 4.3% to 4.5%, its highest level since 2021, raising doubts about the resilience of the domestic economy. Financial markets are now pricing in a higher chance of rate cuts from the RBA (Reserve Bank of Australia) with a 74% probability of a rate cut on 4 November.
The price of gold continues to set fresh record as safe-haven demand strengthens amid intensifying trade frictions, and expectations of further US monetary easing.
Oil prices fell to their lowest point in five months last week, extending their downward trend on growing concerns of a global supply surplus compounded by renewed trade tensions between the US and China.
Stranger than fiction
Waymo will launch robotaxi services in London from next year, its first European venture. The company already operates in five US cities and runs a pilot program in Tokyo. The first autonomous vehicles will start to appear on London streets in the next few weeks as the company maps the city and trains its software.
100,000 Amazon trees have been chopped down to build a new four-lane highway cut through the dense Amazon rainforest to help speed the 70,000 attendees to their luxury hotels for the COP30 Climate Conference in Brazil. Based on trees per acre, an estimated 100,000 mature specimens have been chopped down and logged to build the eight-mile Avenida Liberdade causing untold disruption to local wildlife. No doubt little mention will be made of the astonishing CO2-fuelled growth in global vegetation seen across the planet in the last 40 years. Increases of around 15% are common, some deserts have started to shrink, and world famine has been alleviated by higher crop yields.
Quote
Simone Veil, French magistrate, Holocaust survivor and politician, “I can, therefore I am.”
