Economic Week In Review | Issue 352 | 24 October 2022
Regional land values | Data from Savills shows that regional land values have continued to grow but at a slower rate in Q3. A shortage of development sites has supported growth.
Confidence | The latest Future Trends survey by RIBA shows that confidence amongst architects has reached its lowest point (outside of lockdown) since 2009. Only 16% of architects expect workloads to increase and 52% expect them to stay the same.
Build-to-rent | Research from the British Property Federation and Savills suggests that by 2032 8% of homes for rent will be purpose-built, up from 1.5% today. The sector is expected to increase five-fold and be worth £170bn.
Robot tunnel | The first tunnel in Britain built entirely by robots has been revealed in the North Hampshire Downs. The automated process can build tunnels more than 10 times faster and at half the cost.
Financial concerns in construction firms have increased. The latest report by Begbies Traynor shows a 24% increase (to 561) in the number of building firms with CCJs showing they owe more than £5,000. 79,207 construction-related firms we reported to be in “significant distress”, up 9% from a year earlier.
Infrastructure delays | Nearly one-third of the projects in the £10bn Rail Network Enhancements Pipeline announced by the Government in 2019 have not advanced. The Rail Industry Association carried out its own audit of the programme after the Department of Transport failed to publish its annual progress update.
Materials, commodities and currencies
Commodity boom end | Rio Tinto thinks that the coming recession will calm the commodities boom this year and that prices will fall. The price of iron ore contracts in Singapore has fallen nearly 50% this year. It also warned of slowing iron ore shipments to China.
Yen | The Yen has reached ¥151 against the US Dollar, a 32-year low as Japan sticks to its ultra-loose monetary policy despite most other developed economies increasing interest rates to limit inflation.
Sterling | As UK politics faces another crisis and a further leadership contest, the pound has been volatile against other currencies, particularly in response to the news of Boris Johnson entering and exiting the race.
Retail sales fell in September by 1.4%, much lower than the -0.4% expected by economists. They are expected to fall further in 2023 as mortgage costs and bills increase. Volumes have fallen much faster and more steadily than values because of high inflation levels.
Funding cuts | The new Chancellor, Jeremy Hunt, cancelled most of the UK Growth Plan including its tax cuts (but maintaining the Stamp Duty break) and warned of “more difficult decisions on both tax and spending”.
Mortgages | Banks have withdrawn 60% of mortgages with small deposits (typically aimed at first-time buyers) since the start of the year. Following the UK Growth Plan, many banks have withdrawn their 95% loan-to-value products.
Dock workers at Peel Ports are to begin a two-week strike having rejected an 11% pay increase. Peel Ports has improved its pay offer six times.
Energy | Hydrogen is to be injected into a UK power station for the first time in order to test its practicalities in reducing the overall carbon-intensity and hopefully allow the plant to transition to just hydrogen.
China | GDP growth in Q3 was well below target, currently showing an annual figure of 3.9%, whilst the target is 5.5%. The country’s economy is being affected by its zero-Covid policies and a property crisis. China’s President Xi secured an unprecedented third term in power, having removed the two-term limit in 2018.
European gas | Benchmark gas has fallen to €100/Mwh because of warm weather and ample stockpiles. The rate has fallen 12% recently and is 70% lower than the highs seen in August.
Friday to Friday
Price / Index
Week % change
Annual % change
$ per £
€ per £
Brent Oil $/barrel
“A week is a long time in politics” has never felt more true. In the last week, we’ve seen a new Chancellor write off a fairly fresh economic plan, only for the whole structure to be overturned by the Prime Minister’s resignation and a renewed leadership campaign. Whilst this makes the news tragically fascinating, this lack of stability also provides a (possibly damaging) distraction from the day-to-day running of the country and public projects.
The cookie settings on this website are set to "allow cookies" to give you the best browsing experience possible. If you continue to use this website without changing your cookie settings or you click "Accept" below then you are consenting to this.