UK finance minister announces tax hikes and spending cuts. On Thursday, the UK government unveiled a whopping £55 billion ($66 billion) fiscal plan as it attempts to reduce the gaping government deficit and restore Britain’s economic credibility, even as the country is on the cusp of a recession. In his Autumn statement, the UK Chancellor of the Exchequer targeted the wealthy with higher taxes on wages and dividends whilst extending a windfall tax on oil and gas companies, telling the House of Commons that he was prioritizing “stability, growth, and public services.” These measures are expected to increase financial hardship on millions of Britons as they face the country’s worst cost-of-living crisis in decades and its longest-ever recession.

German investor morale improves on lower inflation hopes. Investor sentiment in Germany improved more than expected in November boosted by hopes that inflation situation will improve, even though the economic outlook for Europe’s largest economy remains subdued. The indicator that gauges economic sentiment rose 22.5 points to minus 36.7 from minus 59.2 in October, a monthly survey by research institute ZEW showed. This exceeded the minus 50.0 economists had forecast. This was the highest reading since June at minus 28.0. The current conditions index improved to minus 64.5 points from minus 72.2 in October. Economists had predicted a reading of minus 68.4. "This is likely to be related above all to the hope that inflation rates will fall soon," said ZEW President Achim Wambach. "In this case, policymakers would not have to hit the brakes on monetary policy as hard and/or for as long as feared.

US retail sales rise solidly. Spending by Americans in shops and online increased more than expected in October as households purchased more goods., suggesting consumer spending picked up early in the fourth quarter, which could help support the economy. Official data showed on Wednesday that retail sales in the US rose by 1.3 percent over September, up from a flat reading in September from August. The increase was led by car sales and higher fuel prices. Excluding cars and fuel, retail spending rose a robust 0.9 percent in October. The data illustrate that consumers are still resilient. This makes life more difficult for the Federal Reserve as it tries to bring inflation under control.

Japan inflation at four-decade high. Japan’s inflation climbed to its highest level in 40 years in October, putting into question the credibility of the central bank’s view that more stimulus is needed to secure stable price growth. Consumer prices excluding fresh food climbed by 3.6 percent in October from a year earlier.  This acceleration was driven by processed food and the fading impact of mobile phone fee cuts, the internal affairs ministry reported Friday. The reading outpaced the 3.5 percent analysts had forecast, marking the fastest price growth since 1982. This data marks the seventh month in a row that Japan has seen inflation levels above the Bank of Japan’s target of two percent.