Converging challenges

Economic Week In Review | Issue 522 | 30 March 2026

UK construction and property

  • Future Homes Standard | The UK’s Future Homes and Buildings Standards will be introduced on 24th March 2027, with a 12-month transition for developers. All new buildings must have on-site renewable electricity (typically solar panels covering 40% of ground-floor area), except high-rise buildings. Low-carbon heating is required; gas boilers won’t be installed in new homes. Heat pumps are expected to be standard. HRB rules begin September 2027.
  • Construction retention | The UK government will ban retention payments in construction contracts, aiming to prevent losses from insolvency, reduce late or missed payments, and improve transparency and collaboration in supply chains.
  • New towns | The government has scaled back its initial plan for new towns, reducing the proposed number from 12 to 7 after announcing the ambitious programme last year. Each location is anticipated to have at least 10,000 homes constructed, with several sites expected to deliver 40,000 or more homes over the coming decades.
  • Product testing | The Office for Product Safety and Standards (OPSS) is broadening the range of construction product testing through a £43 million, eight-year national framework designed to enhance regulatory enforcement and market surveillance throughout the UK. The scope of testing will now include mechanical testing of structural performance and thermal efficiency, with the potential to expand into acoustic and chemical testing of construction products depending on their characteristics.
  • Tender prices | The Building Cost Information Service (BCIS) anticipates that tender prices will increase by 15% and construction costs by 14% over the next five years, reaching up to the first quarter of 2031. This represents a modest adjustment from the January forecast, which projected a 17% rise in tender prices and a 15% increase in building costs by the fourth quarter of 2030.
  • Approved Document B | The consultation on changes to Approved Document B as part of the post-Grenfell review of building regs has opened and is available here. Approved Document B is the statutory guidance supporting fire safety requirements for buildings in England.

 

Global economy

  • Global growth forecast | The OECD’s projections for global growth in 2026 hold steady at 2.9%. However, it now anticipates inflation among G20 countries to reach 4%, which is a significant increase from the earlier estimate of 2.8%.
  • US government shutdown | The partial shutdown of the US government has become the longest in American history, reaching 44 days.
  • EU economy | The European Economic Commissioner has warned that the EU’s economy is at risk of stagflation as a result of increasing energy prices.

 

UK economy

  • UK growth forecast | The latest forecasts from the OECD suggest that the UK is likely to see the largest decline in economic growth amongst all G20 nations, mainly due to the Iran war’s impact on energy and food prices. Growth for 2026 is now predicted to be 0.7%, a decrease from the earlier forecast of 1.2%. Inflation in the UK is now expected to reach 4% this year, up from the previous estimate of 2.5%. The OECD anticipates that inflation will fall to 2.6% in 2027, though this is still higher than the earlier projection of 2.1%.
  • UK inflation | Consumer price inflation in the UK has remained at 3% in the year to February, in line with forecasts but above the Bank of England’s target. Data for the figure was collected before the actions in the Middle East put pressure on energy prices.
  • Consumer spending | A survey by Which? found that price pressures are encouraging half of the UK’s households to use savings, sell possessions, or borrow money to cover the cost of daily essentials. Consumer confidence in the future of the UK’s economy fell by 13 points to -56, the lowest level seen since the end of 2022.
  • Border checks | Biometric border checks for passengers the Port of Dover and Eurotunnel have been delayed again due to technical issues. They were meant to be in place from 10th April 2026.

 

Materials and commodities

  • Iron ore | Chinese portside inventories reached a record high in mid-March due to strong imports and low domestic demand. This has helped keep prices stable.
  • Aluminium | An attack on Iran’s industrial infrastructure has caused “significant damage” to key aluminium plants, according to Emirates Global Aluminium. Meanwhile, Iranian strikes in Bahrain have damaged Alba and EGA’s Al Taweelah aluminium smelter, citing ties to US military and aeronautics firms.
  • Copper | Analysts at Macquarie Strategy claim that copper prices have grown recently due to investor appetite rather than market fundamentals such as supply and demand, calling the metal “overpriced, oversupplied, and over the pond,” suggesting that there is no genuine evidence of constrained supply.

 

Environment

  • Clean energy | UK chancellor Rachel Reeves is preparing to tell the G7 that a move to clean energy is the best defence against energy price shocks.
  • Building emissions | A report from the UK Green Building Council has warned that the UK’s building sector is “dangerously behind” in helping the UK meet its carbon targets as emissions from buildings and infrastructure have barely fallen by half the necessary amount.

 

Friday to Friday

Price / Index Week %
change		 Annual %
change
FTSE 100 9,967.35 0.49 15.11
FTSE 250 20,964.75 -1.64 5.54
Nikkei 53,373.07 0.00 43.78
CSI 300 4,502.57 -1.41 15.00
S&P 500 6,368.85 -2.12 14.12
Nasdaq 20,948.36 -3.23 20.93
CAC 40 7,701.95 0.47 -2.71
Dax 22,300.75 -0.35 -0.75
$ per £ 1.3292 -0.75 2.71
€ per £ 1.1537 -0.19 -3.50
Gold £/oz 3,389.34 0.65 42.17
Brent Oil $/barrel 105.32 -1.02 44.75

Weekly Summary

The events in the Middle East are putting pressure on some supplies, such as aluminium, while others—such as iron ore—are seeing a surplus. Factors beyond the war continue to impact material prices and availability. As the geopolitical context continues to change, it is important that project teams understand what’s driving prices, what’s already included in pricing, and what’s reasonable.

The UK construction industry is grappling with several different challenges: changing regulations, wavering confidence, and the need to support wider sustainability aspirations. As these challenges converge, it is increasingly necessary to understand how any particular project is affected.

 

 

Author contact

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

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