Wednesday’s news cycle is likely to be dominated by the UK spending review by Chancellor of the Exchequer Rishi Sunak, who is expected to outline spending plans for the coming financial year in the House of Commons.

There will also be some action in the corporate calendar in the form of results from United Utilities, while the macro calendar will be offering up US GDP and jobless claims figures.

Sunak steps up for spending review

Chancellor of the Exchequer Rishi Sunak is heading for a somewhat frosty reception when he delivers a spending review, also known as a ‘mini budget’ to the House of Commons on Wednesday, with the revelation that the Treasury is considering a public sector pay freeze having already caused outcry given many of the state’s employees have continued to work during the pandemic at high risk to their health.

The government may also have inadvertently poured salt in the wound by announcing a GBP16bn military spending package the day before, leaving may questioning why buying more weapons is coming at the expense of what many consider to be well-earned wage increases for state workers.

However, Sunak may be able to provide some bright spots in the review, notably any more details on the government’s green spending plans and boosting infrastructure expenditure.

But with the UK economy facing a gloomy outlook at it attempts to recover from the damage caused by the pandemic, Tory MPs are likely to be riled by any plans for tax increases, which are likely to focus on affluent Conservative heartlands in the South in order to ‘level up’ regions in the North and fill the gaping hole in the state’s bank account.

Think-tanks have suggested that the Treasury will need to find around GBP40bn per year in extra tax to plug the gap left by the crisis, although there is considerable debate about where the hammer will fall hardest.

One thing that is unlikely to make an appearance in the statement is any mention of spending cuts or austerity, a brand that has yet to shake off its toxicity after it was implemented by the Tory-Lib Dem coalition a decade ago.

Any implication of spending cuts is likely to draw swift condemnation from the opposition Labour Party, provided it can look away from its infighting for long enough.

United Utilities looks to keep level

United Utilities Group PLC (LON:UU.) said in a recent statement that trading has also been in line with its expectations, so investors will once again be checking its interims for any nasty surprises.

While cash collection is running to plan at the moment, United is predicting a rise in bad debt once government support schemes are wound down, although management have said cash has already been put aside to cover this eventuality.

With most short-term issues in hand, regulation is likely to be the key long-term focus, as well as the risk of lower water use by business customers as shops and other outlets are closed by new restrictions, which is expected to results in a 5% drop in revenue.

Significant announcements for Wednesday November 25:

UK spending review

Trading updates: Melrose Industries PLC (LON:MRO), Rotork PLC (LON:ROR)

Interims: United Utilities Group PLC (LON:UU.), Babcock International Group PLC (LON:BAB), De La Rue PLC (LON:DLAR), Alpha Financial Markets Consulting PLC (LON:AFM), D4t4 Solutions PLC (LON:D4T4), Helical PLC (LON:HLCL), HICL Infrastructure PLC (LON:HICL), Liontrust Asset Management PLC (LON:LIO), Shearwater Group PLC (LON:SWG)

Finals: Virgin Money UK PLC (LON:VMUK), Brewin Dolphin Holdings PLC (LON:BRW), Cambria Automobiles plc (LON:CAMB)

Economic data: US GDP, US durable goods orders, US jobless claims, US personal spending

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