Thanks for joining me. Jeremy Hunt has been handed room for tax cuts before the next election as government borrowing came in nearly £20bn below official forecasts in the first half of the financial year.

Public sector net borrowing excluding banks was £81.7bn in the six months to September, which was well below the £101.5bn forecast by the Office for Budget Responsibility (OBR) in March.

5 things to start your day 

1) ‘Horrifying’ Israel attack risks derailing global recovery, says Fed chief | Jerome Powell says policymakers are ‘proceeding carefully’ amid fears of prolonged Middle East conflict

2) ‘Holy grail’ bottle of whisky expected to fetch £1.2m at auction | Macallan Adami 1926 is believed to be world’s ‘most sought-after’ bottle of Scotch

3) OBR admits ‘genuine errors’ in its economic forecasts | Latest report reveals financial watchdog missed the mark on inflation and growth

4) Founder of China’s biggest private developer denies fleeing the country as debt default looms | Denial comes after Country Garden missed a $15.4m debt payment

5) ‘Greedy’ petrol stations charging 5p a litre more than they should, says AA | Motoring association claims average pump price failing to keep pace with falling costs

What happened overnight 

Asian shares retreated after Wall Street came under pressure from the prospect of a 5pc yield on the 10-year US Treasury bond for the first time since 2007.

Tokyo’s Nikkei 225 index lost 0.5pc to 31,266.84 after the government reported that consumer inflation was higher than expected in September. The core inflation rate, which excludes volatile fresh food prices, rose 2.8pc from a year earlier in September.

It was the first time in 13 months that core CPI inflation has fallen below 3pc. But when excluding both fresh food and fuel prices, inflation was 4.2pc, still close to the 40-year peak of 4.3pc recorded earlier this year.

China announced it was keeping its benchmark lending rates unchanged, with the one-year loan prime rate unchanged at 3.45pc and the five-year LPR at 4.2pc, in line with market expectations.

Hong Kong’s Hang Seng shed 0.4pc to 17,236.04 and the Shanghai Composite index dropped 0.3pc to 2,995.23.

The Kospi in Seoul lost 1.5pc to 2,380.62. Australia’s S&P/ASX 200 sank 1.3pc to 6,893.60. India’s Sensex was 0.4pc lower and Bangkok’s SET fell 0.3pc.

On Thursday on Wall Street, rising bond yields meant the S&P 500 shed 0.8pc to 4,278.00, while the Dow Jones Industrial Average dropped 0.7pc to 33,414.17. The Nasdaq Composite sank 1pc to 13,186.18.

The yield on the 10-year Treasury touched 4.99pc up from 4.91pc late Wednesday, before paring its gain to 4.98pc.

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