In search of a plan

Economic Week In Review | Issue 386 | 3 July 2023

UK construction and property

  • Tax | HMRC’s construction tax helpline is piloting its “seasonal model” which means that it will be closed for the next three months.
  • Migration | A report by the CITB found that only half of employers surveyed were aware of the new points-based migration system and only 7% had signed up to become a licensed sponsor. The CIOB’s Policy and Public Affairs Manager said that “migration is a vital factor in plugging the significant skills gap across the construction industry” but that these findings show there is a real need to increase the pool of domestic workers too. The organisations urged the Government to better engage with construction companies on the matter.
  • Concrete inspections | A remote inspection platform for concrete, known as ALICS (Adaptive Lighting for the Inspection of Concrete Structures) has been developed by the University of Strathclyde and is expected to save asset owners up to £1m per day by detecting faults in civil engineering structures.
  • Pay levels | The official CIJC rate of pay will increase 6%, with an additional 1.5% rise in the new year. Travel allowances, sick pay, and fare allowances will also increase.
  • Infrastructure | Ofwat, the water regulator, has approved work starting on 10 storm overflow projects. Over the next two financial years, work worth £2.2bn on 33 schemes will begin.
  • Health and safety | Surprise visits from HSE have fallen to a record low. The number of inspections has consistently fallen since 2010, with proactive inspections falling 34% since 2013/14.
  • School rebuilding | The UK’s public spending watchdog has warned that the rebuilding of schools in England which are at risk of collapse is too slow and the scheme does not have enough funding. 24,000 of England’s school buildings are past their initial design life and 572 are thought to have been built with reinforced autoclaved aerated concrete which is thought to have significant structural issues. In contrast, the Department for Education has reported that £7bn a year is a best practice level of capital funding to maintain, repair, and rebuild the school estate. It has been given an average of £3.1bn since 2016, and has spent an average of £2.3bn a year.
  • Affordable Homes | In a significant policy change, Homes England has announced that funding granted by the Government’s Affordable Homes Programme 2021-2026 can be used to fund replacement homes, as well as new homes, as part of wider estate regeneration plans.
  • Housing tension | Pollution rules such as those for waste water and sewage are a major obstacle to meeting the government’s target of 300,000 new homes a year, according to Baroness Scott of Bybrook. The Baroness told the House of Lords that development had been stalled in 27 areas covering 14% of England. The Home Builders Federation also claims that the rules are disproportionate and argues that the real cause of the issue is sewage dumping by water companies.

Materials and commodities

  • Lithium | Mining of battery-grade lithium carbonate will begin in Cornwall within the next five years. It could produce 20,000 tonnes of lithium carbonate equivalent per year, meeting two-thirds of the UK’s demand by 2030.
  • Steel tariffs | Having paused the Trump-era tariffs last year, the EU and the USA are looking for a new deal in October. The EU rejected the USA’s proposal on concerns that it is likely to break World Trade Organisation rules because it discriminates in favour of local producers.

UK economy

  • Financial services and Brexit | The UK has signed a memorandum of understanding with the EU to increase cooperation onfinancial services. The plan includes a twice-yearly forum to discuss regulation and standards but falls short of being an “agreement” as it doesn’t mean that the UK will follow the EU rules and regulations.
  • Skilled workers | With the ongoing debate over skilled versus unskilled workers, the government is being urged to consider fruit pickers as skilled workers. Next year, a further 45,000 seasonal worker visas will be made available and £12.5m is being spent on research and developing autonomous and robotic solutions. The Migration Advisory Committee is carrying out an inquiry into seasonal worker visas.
  • Historic NHS plan | A 15-year plan to tackle shortages in the NHS will see consultations on whether five-year medical degrees could be shortened and will create the first-ever apprenticeship scheme for doctors. Currently, 10% of posts are unfilled which leads to 110,000 vacancies. The plan does not consider pay, focussing on training needs instead and has taken a year longer than expected to produce.
  • Savings | The cost of living is taking its toll on households, as the Bank of England reported that customers withdrew a record amount from savings accounts in May — a net withdrawal of £3.8bn compared to a net deposit of £5.3bn in April.

Global economy

  • Eurozone inflation fell to 5.5% as energy prices fell, with core inflation increasing slightly to 5.4%.
  • US economy | Data released last week showed a surprising strength in the US economy. Sales of new homes grew at their fastest rate in more than a year and consumer confidence levels were at their highest since the beginning of 2022.
  • India | On the first day of the Paris Airshow, Indian air carrier IndiGo announced a record £43bn order of 500 Airbus A320 planes, the largest single purchase made by a commercial airline. India is expected to be the fastest-growing G20 economy over the next few years and has seen a large increase in first-time fliers.


  • Heat pumps | The UK Government missed its annual target to issue 30,000 grants in England and Wales, managing just half of this number. It blamed a lack of installers and the cost of properly insulating homes to ensure they are suitable for a heat pump. The scheme runs until 2028.
  • Climate watchdog | The Climate Change Committee, a statutory advisory body to the UK Government issued its 2023 Progress Report to Parliament which stated that the UK was no longer a world leader on climate issues given its recent backing of new oil and gas, airport expansion, and lack of action on heat pumps. It called for the UK to scrap its planned road schemes.
  • El Niño | The cyclical weather pattern could keep global food prices high this year as it creates more extreme weather events.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,531.53 0.93 5.06
FTSE 250 18,416.76 1.96 -1.18
Nikkei 33,189.04 1.24 27.97
CSI 300 3,842.45 -0.56 -13.98
S&P 500 4,450.38 2.35 16.34
Nasdaq 13,787.92 2.19 23.90
CAC 40 7,400.06 3.30 24.77
Dax 16,147.90 2.01 26.03
$ per £ 1.2708 0.08 5.46
€ per £ 1.1640 -0.20 0.56
Gold £/oz 1,511.72 0.06 1.02
Brent Oil $/barrel 74.90 1.42 -32.90

Weekly Summary

The need for investment in the nation’s infrastructure is clear, but several tensions exist with climate ambitions and funding constraints.

The ongoing debate over what constitutes a highly skilled worker highlights that we need to increase efforts into upskilling the workforce, attracting more people into necessary industries, and increasing productivity.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst