"Less bad..."?

Economic Week In Review | Issue 363 | 23 January 2023

UK construction and property

  • Labour needs | The Construction Industry Training Board reports that an additional 225,000 extra construction workers will be needed by 2027 to meet the current known pipeline. This equates to an annual requirement of almost 45,000 per year, a reduction from the previous forecast of 53,000.
  • Levelling up | Details of 111 projects which are set to share a £2.1bn levelling up fund have been announced. The fund, which will expire in March 2025, will be split between improving transport links (£672m), community regeneration (£821m), and local heritage sites (£584m). The announcement was delayed from October 2022 due to the rapid changes at Number 10.
  • Rail frameworks | Network rail has named five contractors to deliver a £2bn programme of works over the next eight years in Wales and the Western region.
  • Confidence | The RIBA’s confidence index increased in December with optimism over future workloads increasing at the fastest rate since the end of the first Covid-19 lockdown, aided by greater political stability.

Materials and commodities

  • Steel | British Steel announced price increases of £75/tonne which it attributed to increased costs of manufacturing. However, reports suggest that the price increases are not sticking due to reduced demand.
  • Commodity demand | BHP expects demand from China to stabilise markets this year as its growth-based policies and support for the property sector offsets weak demand from other places.


  • Wind farms | Six offshore wind farms are expected to come on stream by 2030 and will provide enough energy for seven million homes, after The Crown Estate signed lease agreements.
  • Emergency plans | The UK grid will use new emergency measures today as reduced wind power coincides with a cold snap. Three coal plants are on standby, and prices for the evening are the highest since 21st December 2022.

UK economy

  • Worker shortfall | Thinktanks Centre for European Reform and UK in a Changing Europe have found that Brexit has created a shortfall of 330,000 workers in the UK.
  • Innovation and investment | UK car battery company Britishvolt was placed into administration after a long battle to secure funding. The company had planned to build a £300m plant in Northumberland.
  • SME confidence | A survey by the Association of Chartered Certified Accountants and the Corporate Finance Network shows that the number of SMEs planning to expand has fallen from 38% to 17% and a small and variable percentage expects to recruit (10% in London, 1% in the East of England).
  • Mass strike | Nearly half a million workers could strike on a single day of action on 1st February if all members of the proposed unions walked out. The ONS estimates that the equivalent to 467,000 working days were lost in November.
  • Inflation | Andrew Bailey, Governor of the Bank of England suggested that falling energy prices will give an “easier path” to lower inflation and that December’s lower inflation figure of 10.5% was “the beginning of a sign that a corner has been turned”.
  • Retail sales in December were lower than expected, falling 1% in the crucial Christmas period.
  • UK economic forecasts | Business consultancy EY has increased the depth of its predicted recession for the UK from -0.3% in October 2022, to -0.7% because of reduced government support, higher taxes and an overall worsening outlook.

Global economy

  • Global forecast | The International Monetary Fund reported that growth prospects have increased recently as inflation fell from a four-year high, but warned against over-optimism. Its managing director, Kristalina Georgieva, said “My message is that it is less bad than we feared a couple of months ago but that doesn’t mean good”.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,770.59 -0.94 3.69
FTSE 250 19,702.63 -1.25 -11.50
Nikkei 26,553.53 1.66 -3.52
CSI 300 4,181.53 2.63 -12.51
S&P 500 3,972.61 -0.66 -9.67
Nasdaq 11,140.43 0.55 -19.09
CAC 40 6,995.99 -0.39 -1.03
Dax 15,033.56 -0.35 -3.65
$ per £ 1.2371 1.46 -8.77
€ per £ 1.1422 1.26 -4.43
Gold £/oz 1,553.38 -1.05 14.72
Brent Oil $/barrel 87.63 2.76 -0.30

Weekly Summary

The International Monetary Fund’s warning that we shouldn’t “go from being too pessimistic to being too optimistic” sounds perfect for the current time. Some parts of the market are seeing increased stability, and demand, whilst others are still showing volatility.

The greatest challenge is that despite measures now being put in place for many of the current pressure points, the benefits of these will not be felt for some years, allowing volatility to prevail in the meantime.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst