Confidence and derivatives

Economic Week In Review | Issue 499 | 29 September 2025

UK construction and property

  • Mental health | The Construction Leadership Council (CLC) launched an industry-wide consultation to address the causes of poor mental health across the construction sector. The CLC said the UK construction industry faces a suicide rate almost twice as high as the national average, with 30 suicides per 100,000 construction workers in 2021, according to the ONS.
  • Culture change | The new president of the Building Engineering Services Association (BESA) has said that contractors need to lead cultural change within the industry rather than the government. The BESA will develop a “Skills Legacy” program to ensure knowledge transfer and stop experienced knowledge from being lost to the industry.
  • Low housing demand | According to the Construction Product Association (CPA), demand for housebuilding has still not materialised, with sluggish housebuilding growth in the second quarter. This weak demand has also pushed down price inflation. The Home Builders Federation revealed that the number of planning permissions granted has dropped by 17% in Q2, to the lowest levels seen since 2012.
  • New towns | The government confirmed it will progress work on three New Towns after the New Towns Taskforce published a list of 12 recommended locations. Three will be delivered this Parliament: Tempsford in Bedfordshire, Crews Hill in Enfield, and Leeds South Bank.
  • Construction innovation | A survey by global product and service solutions provider RS revealed that 40% of UK construction firms take an opportunistic approach to innovation, while only 52% have a proactive strategy. AI is a priority for 39% of leaders, but insurers express concerns about AI governance and data security. Key innovation drivers are cost reduction, customer attraction, operational improvement, and revenue growth.

Global economy

  • German economy | Leading economic institutes in Germany have revised their 2025 growth expectations upwards to 0.2%, a small upgrade from their previous forecast of 0.1%. They have maintained the forecasts for 2026 at 1.3%, as government spending should help the economy gain momentum in line with government plans to sharply increase infrastructure and defence spending.
  • European sentiment has improved slightly after the EU’s trade deal with the US, with the European Commission’s eurozone sentiment tracker edging up from 95.3 in August to 95.5 in September.

UK economy

  • Cyber-attack | The UK government will underwrite a £1.5 billion loan guarantee to Jaguar Land Rover after it needed to suspend production at its UK factories following a cyber-attack at the beginning of September. The shutdown is expected to last until 1 October.
  • Population | The UK’s population has grown by more than three-quarters of a million in the year to June, the second-largest increase in 75 years. Most of the increase was due to international migration whilst the total number of births in the UK was the lowest for at least 42 years.
  • UK forecasts | KPMG UK forecasts modest GDP growth of 1.2% in 2025, tapering to 1.1% in 2026. They highlighted growth constraints caused by high taxes, weak productivity, and global trade tensions, with business investment projected to rise by 1.9% this year, while consumer spending remains weak. KPMG expects inflation to peak at 4% this autumn, fuelled by soaring food prices, rising labour costs, and global supply chain disruptions, before easing towards the 2% target by mid-2026.

Materials and commodities

  • China metals | China has reduced its annual growth target for non-ferrous metals as its policy shifts from expansion to efficiency and sustainability. Average annual growth in production is expected to be 1.5% now, rather than 5% as it previously expected.
  • EU steel | The EU steel market is concerned that a list of 407 products classified as “derivative” inclusions for the 50% steel tariff could be expanded, as the US suggested that it could be a rolling list. The current list includes wind turbines, mobile cranes, and bulldozers.
  • Oil | According to BP’s latest Energy Outlook report, the company now expects oil demand to continue to grow until around 2030, five years later than its forecast a year ago, pointing to slowed efforts to increase energy efficiency and reduce global carbon emissions. This outlook aligns with broader industry trends, though it contrasts with the International Energy Agency (IEA) forecasts, which see demand peaking sooner.

Environment

  • Carbon capture | Construction will begin on two of the UK’s new carbon capture storage projects after contracts were signed in the cement and energy-from-waste sectors.
  • Fossil fuels | A report written by the Stockholm Environment Institute (SEI), Climate Analytics, and the International Institute for Sustainable Development (IISD) has found that some of the biggest fossil fuel-producing nations are planning even more fossil fuel production than before. In total, governments plan to produce nearly 120% more fossil fuels by 2030 than the levels needed to limit global warming to 1.5°C.
  • Oceans treaty | The High Seas Treaty received its 60th ratification, meaning the global agreement designed to protect the world’s oceans and reverse damage to marine life is set to become international law, taking effect in January. The law pledges to put 30% of international waters into Marine Protected Areas. Currently, just 1% of the high seas are protected, leaving marine life at risk of overexploitation.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 9,284.83 0.74 11.59
FTSE 250 21,681.48 0.42 2.08
Nikkei 45,354.99 0.69 13.87
CSI 300 4,550.05 1.07 22.85
S&P 500 6,643.70 -0.31 15.78
Nasdaq 22,484.07 -0.65 24.09
CAC 40 7,870.68 0.22 1.01
Dax 23,739.47 0.42 21.91
$ per £ 1.3401 -0.62 0.04
€ per £ 1.1463 -0.08 -4.51
Gold £/oz 2,805.33 2.54 41.12
Brent Oil $/barrel 69.22 3.81 -3.83

Weekly Summary

In recent news, many of the economic indicators have been fairly subdued despite headwinds from global politics, persistent general inflation, and muted confidence from investors.

This week marks the start of the political party conference season, and these events will be closely watched for hints as to what the Autumn Statement could contain and whether it could provide a boost to confidence.

Author contact

Rachel Coleman
Rachel Coleman,
Associate Research Analyst
Kishan Patel
Kishan Patel,
Research Analyst

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