This update was written automatically with AI from market data and news wire reports, and published without review by a person.
Key Takeaways
- US PCE Supercore inflation accelerated to 3.596% year-over-year in September, up from 3.493% in August, signaling persistent price pressures in the services sector.
- Air France (AF) has extended its suspension of flights to Riyadh until December 12, 2026, following security concerns and recent drone interceptions in Saudi Arabia.
- UK Prime Minister Andy Burnham and Chancellor John Healey have signaled a need to reduce the national welfare bill, despite internal party pressure to prioritize social security over defense spending.
- Headline US PCE inflation rose to 3.6% annually, while the core rate (excluding food and energy) edged up to 3.1%, matching market expectations but remaining well above the Federal Reserve's 2% target.
US Inflation Remains Resilient in September
The latest data from the U.S. Bureau of Economic Analysis (BEA) reveals that underlying inflation remains a significant hurdle for the Federal Reserve. The PCE Supercore (Y/Y), which tracks services inflation excluding housing and energy, climbed to 3.596% in September. On a monthly basis, the Supercore figure saw a slight cooling to 0.367% from the previous month's 0.373%, though the annual acceleration suggests that service-sector costs remain "sticky."
Broader inflation metrics also showed modest increases, with the Core PCE Price Index rising 3.1% year-over-year. Market analysts suggest that these figures, while meeting consensus estimates, may force the Federal Reserve to maintain higher interest rates for a longer duration to ensure inflation returns to its long-term target. Personal income grew by 0.2% in September, while nominal consumer spending increased by 0.5%, though real spending was virtually flat when adjusted for inflation.
Air France Extends Riyadh Suspension Amid Security Risks
Air France (AF) announced it will continue the suspension of all flights to and from Riyadh through December 12, 2026. This decision follows a series of regional security developments, including reports of intercepted drones over Saudi territory earlier this month. The airline had previously set earlier resumption dates but has repeatedly pushed them back as security assessments evolve.
The suspension is part of a broader trend among international carriers, including Lufthansa and Cathay Pacific, which have also modified or cancelled services to the region. Travelers are being advised to verify flight statuses directly with carriers, as the reopening of King Khalid International Airport has not yet led to a full restoration of international flight schedules.
UK Government Targets Welfare Reform in 2026 Budget
In the United Kingdom, the administration led by Prime Minister Andy Burnham is facing a delicate balancing act between defense commitments and social spending. A spokesperson for the Prime Minister confirmed that both Burnham and Chancellor John Healey believe the national welfare bill "needs to come down." This stance comes as the government prepares for a challenging fiscal environment, with the welfare budget projected to reach 11.1% of GDP by 2030.
The 2026 Budget, recently delivered by Healey, included measures to ease the cost of living, such as a £100 energy payment for households. However, the government is under pressure from the opposition to implement more aggressive welfare cuts to fund a planned increase in defense spending to 3.5% of GDP by 2035. Burnham has maintained that national security cannot come at the expense of social security, seeking to frame welfare reform as a means of moving people from benefits into the workforce rather than through "crude cuts."
Automated market updates written with AI from market data and news wire reports, published without human review.