Issue 531 | 01 June 2026 - Turner & Townsend alinea

UK construction and property

Homes England has launched a £16bn National Housing Bank to boost housing delivery, offering guarantees, loans, and equity to help developers start projects sooner. The initiative aims to support smaller builders and increase UK housing supply but depends on more public-sector risk-taking.
UK construction hiring, according to the ONS, is more selective, with 11% more trades/site workers needed, but 6% fewer managers hired. Increasing cost pressures haven’t meant there is more of a focus on finishing current projects over expansion. However, higher operational activity suggests increased demand for management roles when market confidence improves.
UK house prices declined by 0.6% in May 2026, which was a greater decrease than anticipated, indicating a slowdown in the housing market. This larger-than-expected monthly drop points to reduced momentum in the UK housing sector, even though prices are still somewhat higher compared to the previous year.

Global fiscal risks | IMF warns global fiscal risks are growing due to higher spending, rising interest costs, and shifting debt markets. Public debt may reach 100% of GDP by 2029, with the US debt increasing faster. Interest payments now near 3% of global GDP, straining government budgets.
Global trade surged in Q1 2026, with G20 goods trade up 5.3% Q-Q despite Middle East tensions. Growth was led by high-tech exports from East Asia, notably China and Korea; North America saw strong gains, Europe saw modest gains. Services trade rose 1.5–1.7%, reflecting mixed results across regions and sectors. Goods trade outpaced services, highlighting a resilient but uneven recovery.
Wealth creation | Emerging markets is expected to add about $12 trillion in financial wealth by 2030, shifting wealth creation from the US and Europe to cities like Mumbai, Riyadh, Ho Chi Minh City, and Sao Paulo, per Boston Consulting Group’s Global Wealth Report.
China-EU trade | Facing trade imbalances and rising competition from China, the EU is weighing stronger, US-style trade protections to shield its economy. Meanwhile, EU export and investment opportunities in China are shrinking, and Europe is importing more Chinese goods than it exports. China has warned the EU against protectionism, threatening retaliatory trade actions.

UK NEET (Not in Education, Employment or Training) youth numbers are at a 12-year high, with 613,000 economically inactive. Without intervention, NEETs could hit 1.25 million by 2031, costing up to £125bn annually.
Cost of living | The UK government is rolling out a set of initiatives designed to lower daily travel and food expenses, with the goal of alleviating cost-of-living pressures that are partly influenced by global events such as conflict in the Middle East. These tax reductions, subsidies, and price relief efforts mainly target food and travel, providing support to both consumers and businesses.
UK manufacturing prices and costs are rising at their fastest rates in nearly four years due to supply chain issues and geopolitical tensions. Despite this, the manufacturing PMI increased to 53.9, the highest since May 2022, signalling expansion. However, this growth is likely to be temporary, driven by front loading and inventory buildup.

UK household energy bills are expected to increase by 13% from July, largely because of rising global gas prices connected to the Middle East conflict. The energy price cap will go up to approximately £1,862 from £1,641, resulting in an average annual increase of about £221 for typical households.
LNG | Canada and Germany have agreed on a landmark LNG deal for Canada to supply Germany with one million tonnes of LNG annually for up to 20 years starting in the early 2030s, supporting Europe’s search for reliable energy and Canada’s trade diversification.
Aluminium | Canada is shifting aluminium exports from the US to Europe due to a 50% US tariff and record-high European premiums, up 73%. Europe is expected to have a 5.6m-ton deficit in 2026, higher than the global 2.2m-ton and US 3.8m-ton shortfalls. Last year, Europe sourced 1.3M tons (21%) of its aluminium from the Middle East.

Climate change | The UN warns there’s an 86% chance a year between 2026-2030 will be the hottest on record and a 75% chance global temperatures will exceed 1.5°C above pre-industrial levels. Rising fossil fuel emissions and a likely El Niño in late 2026 may further increase warming.
Climate ruling | The UN General Assembly has endorsed a significant international court decision stating that nations are legally required to address climate change, reinforcing the worldwide movement for climate accountability. This UN resolution represents a substantial change in global climate governance, indicating that climate action is not only a policy issue but is also becoming a matter of legal duty and accountability.