Critical timing

Economic Week In Review | Issue 396 | 11 September 2023

UK construction and property

  • West End deals | Savills has reported a number of office deals and increased footfall, suggesting that the market is recovering. Footfall has increased 13% year on year, and the number of international visitors has increased 25% when compared to last year. BNP Paribas commented that the key fundamentals of rental growth, character, leisure offering and an attractive occupier base are strong in the West End.
  • Damp and mould guidance | The Department for Levelling Up, Housing and Communities has published new guidance to understand and address the health risks of damp and mould in the home. It is targeted at the housing sector and sets out clear expectations for landlords.
  • Strikes | More than 3,000 engineering construction workers operating under the Blue Book agreement will be balloted for strike action. The dispute is over pay, and that the value of pay has fallen progressively since the pandemic. Pay levels were frozen throughout Covid-19, and a two-year pay deal of 2.5% was given in January 2022.
  • New orders | The latest S&P Global / CIPS UK PMI for construction posted a reading of 50.8 in August, lower than July’s 51.7, but still positive. Both commercial and civil engineering work expanded, offsetting a slump in housebuilding. The survey also found that total new order volumes fell for the second time in three months. The reduction in new residential work has been the steepest since 2009.
  • Housebuilding | PwC’s Construction and Housebuilding Outlook claims that housebuilding will fall 21% this year, infrastructure will remain strong in the long term, and repair and maintenance will be more resilient than new build work. It suggests that overall construction output will decline by 5% this year before returning to growth next year.
  • High street reform | The Chair of the John Lewis Partnership, has called on the government to set up a Royal Commission to review the health of town centres and how to revive them. She also commented that business rates, outdated planning rules and the “tourist tax” have all affected high streets.

Materials and commodities

  • Shipping | The volume of world trade has fallen almost 2% compared to a year earlier according to the Netherlands Bureau for Economic Policy Analysis (CPM).
  • Gas prices in Australia have increased following strike action at two major liquified natural gas plants (LNG). The two plants account for more than 5% of global LNG capacity. The impact pushed wholesale gas prices in the UK up by 10%.

UK economy

  • Interest rates | The Governor of the Bank of England has told MPs that interest rates are much nearer now to the top of the cycle”. The Bank is expected to increase rates again later this month, to 5.5%
  • Electric vehicle production | Production has begun at Stellantis’ factory in Ellesmere Port, which is the UK’s only dedicated electric vehicle manufacturing plant. It comes after a £100m investment from Stelllantis to buy the former Vauxhall site. It was also announced that BMW will invest £600m to prepare its Oxfordshire plant to build electric cars.
  • Strike laws | The Trades Union Congress will report the UK government to the UN watchdog over new strike laws. The new rules will require some employees to work during strikes, or face being sacked. It is argued that the rules fall short of international legal standards and remove the ability to strike.
  • Retail news | The rescue of high street retailer Wilko collapsed, leaving 10,000 workers wondering what the future holds. Over 1,000 redundancies have already been announced, and rival B&M has taken on up to 51 of Wilko’s 400 shops.
  • Housing | Rents in the UK are expected to rise 25% by 2026 as landlords pass on the impact of higher interest rates, according to Hamptons International.

Global economy

  • Energy in Texas | Following its first power emergency two years ago, Texas has issued a Level 2 emergency warning in response to low supplies of available power. It has been drawing on reserve power and encouraging consumers to lower demand.
  • US Treasury | Janet Yellen, US Treasury Secretary, has said that she is increasingly confident that the US will be able to manage inflation without substantial damage to the economy.
  • China’s exports have fallen for a fourth month in a row, falling 8.8% in August whilst imports fell 7.3%. The falls were less than expected but still show that “the world’s factory” is struggling.
  • Dubai housing | The cost of renting a house in Dubai has increased by an average rate of 36% since last year according to estate agency Betterhomes. The increase is being attributed to greater demand, especially from Russian investors.


  • Offshore wind | An auction of seven UK offshore wind projects resulted in zero bids. Developers have said that the price set by the government for electricity is too low to make the projects viable and fails to take into account increases in the cost of materials.
  • Fossil fuels | The UN has warned that the world is at a “critical moment” and will miss vital climate targets unless fossil fuels are phased out.

Friday to Friday

Price / Index Week %
Annual %
FTSE 100 7,478.19 0.18 1.73
FTSE 250 18,463.19 -0.40 -3.78
Nikkei 32,606.84 -0.32 15.57
CSI 300 3,739.99 -1.36 -8.64
S&P 500 4,457.49 -1.29 9.59
Nasdaq 13,761.53 -1.93 13.62
CAC 40 7,240.77 -0.77 16.55
Dax 15,744.75 -0.60 20.30
$ per £ 1.2474 -0.96 7.56
€ per £ 1.1648 -0.23 0.90
Gold £/oz 1,539.27 -0.12 3.87
Brent Oil $/barrel 90.65 2.37 -2.36

Weekly Summary

The UN’s warning couldn’t have come at a more appropriate time, as the UK has endured seven consecutive days when the mercury has reached 30 degrees or more – a rather unwanted new record. That also coincides with the revelation that there are no bidders for several offshore wind schemes. Taken together, those pieces of news show that something has to change.

For more immediate concerns: the next few weeks hold key information on the UK economy, following the ONS’s recent large revisions. Unemployment levels, GDP and inflation figures will be released, as will the outcome of the latest decision on interest rates from the Bank of England.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst