Sharp drops and record rises

Economic Week In Review | Issue 502 | 20 October 2025

UK construction and property

  • Planning amendments | The Planning and Infrastructure Bill has been amended to accelerate development in housing, clean energy, and water projects. Proposed changes include “holding directions” from ministers while Whitehall decides whether to ‘call in’ decisions, and a new mechanism to stop planning permissions from expiring during court challenges.
  • Viability | Research from Molior’s quarterly residential development report warned that only a fraction of schemes with existing planning permission are likely to be built, as sales values no longer support development in much of the capital due to high construction costs.
  • Total construction output fell by 0.3% in August 2025, following zero growth in July, according to the ONS. The decline was due to a 1.5% fall in repair and maintenance work, while new work rose by 0.5% in August.
  • Labour shortage | Construction roles such as bricklayers, electricians, steel erectors, stonemasons, plasterers, and painters remain on the UK’s new Temporary Shortage List (TSL), which allows overseas workers to apply for skilled worker visas. Rail and rolling stock builders and repairers, as well as toolmakers previously eligible under the former skilled worker visa scheme, are not included on the new list. Visas under the TSL will be valid for 3 to 5 years.
  • Skills study | The RICS released a report on the state of skills in the global surveying profession, warning that the profession continues to face significant and widening skills shortages. The full report is available here.
  • Affordable homes | Housing Secretary Steve Reed and Mayor of London Sadiq Khan are preparing to announce a new package aimed at stalling the sudden drop in new building in the capital. Among the plans are allowing lower numbers of affordable homes and higher subsidies.

Global economy

  • US growth | The IMF has raised its growth forecast for the US in its latest World Economic Outlook, projecting the US to grow by 2% in 2025 and 2.1% in 2026. Despite the projected increase in growth, US core inflation has ticked up to 2.9% from 2.7% a year ago, with a cooling labour market reflecting firms’ uncertainty created by the higher tariffs.
  • Global growth | The IMF has increased its forecasts for global growth to 3.2% for this year and 3.1% in 2026, as the global economy has fared better than expected from tariff disruptions due to new negotiations, limited retaliation from other countries, and agile private sector responses, such as front-loading imports and rerouting supply chains.
  • Global debt across the world is on course to hit 100% of global GDP by 2029, the highest level since the aftermath of the Second World War. The IMF attributed this to the upward pressures on spending in many countries, alongside a reluctance to increase taxes.

UK economy

  • Wage growth slowed to 4.7% in the three months to August 2025 compared with a year earlier. Unemployment rose to 4.8%, the highest since early 2021, while real earnings growth (adjusted for inflation) dropped 0.9%, the lowest in two years. Despite the continued slowdown, the jobs market may be stabilizing, with a rise in UK workers on payrolls along with the smallest decline in vacancies since the start of 2025.
  • UK economy | The IMF projects that the UK economy is set to be the second-fastest growing of the world’s most advanced economies this year, according to its latest World Economic Outlook, with a modest growth of 1.3% projected in 2025 and 2026. However, the IMF warned that the UK still faces the highest rate of inflation among G7 nations both this year and next, with prices forecasted to rise by 3.4% this year and 2.5% in 2026.

Materials and commodities

  • Steel | The cost of taking control of British Steel has risen to £235 million, as the UK government has acknowledged concerns over the threat of EU tariffs that could significantly harm UK steel, given that 78% of all steel exports from Britain went to the EU.
  • Copper recycling | A new £41m recycling plant with the capacity to process up to 25,000 tonnes of copper-bearing waste a year has opened in Kent. According to lead producer Britannia Refined Metals (BRM), the plant aims to boost the recycling of copper and other precious metals from waste electrical and electronic equipment.

Environment

  • Shipping emissions | A landmark deal to cut global shipping emissions has been abandoned after Saudi Arabia and the U.S. ended the talks, with President Trump calling it a “green scam” and threatening tariffs against those supporting it. If the green shipping regulations had been adopted, it would have been the first time there had effectively been a global tax on greenhouse gas emissions.
  • Sustainability law | The European Parliament’s legal committee voted to scale back the scope of the Corporate Sustainability Due Diligence Directive (CSDDD), a law aimed at holding companies accountable for environmental and human rights abuses across their entire value chain. The revised version limits obligations to larger companies with 5,000 or more employees and at least 1.5 billion euros in turnover.
  • Carbon dioxide | Global CO2 concentrations rose by a record amount in 2024, the largest single jump since measurements began in 1957, according to a report by the World Meteorological Organization. Scientists attributed the rise to a combination of factors, including continued fossil fuel emissions, the El Niño weather pattern, which reduces the ability of forests and oceans to absorb CO2, and warming-induced feedback loops, such as wildfires and permafrost thawing.

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 9,354.57 -0.77 11.92
FTSE 250 21,782.96 -0.09 2.99
Nikkei 47,582.15 -1.05 22.06
CSI 300 4,514.23 -2.22 15.01
S&P 500 6,664.01 1.70 13.63
Nasdaq 22,679.97 2.14 22.66
CAC 40 8,174.20 3.24 7.36
Dax 23,830.99 -1.69 21.23
$ per £ 1.3420 0.60 3.07
€ per £ 1.1497 0.09 -4.17
Gold £/oz 3,167.13 5.29 51.88
Brent Oil $/barrel 61.29 -2.30 -16.11

Weekly Summary

The latest forecast from the International Monetary Fund shows that, while global policy remains in flux, the trade tensions have not had as much of an impact as first thought. Yet, they have still caused subdued growth when compared to pre-policy forecasts, and risks remain, especially those caused by prolonged uncertainty.

The other key warning in this week’s news is that global CO2 concentrations rose by a record amount in the last year, demonstrating the need to move closer to a net zero future. Yet, the collapse of the shipping emissions talks shows how global trade tensions have impacts beyond economic ones.

Author contact

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

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