Welcome back to another edition of Your Panthera Consultancy Weekly Newsletter. Every week, we scout the news for the top financial and economic stories so you don’t have to. Our goal is to save you time while also helping you Stay Informed & Stay Ahead.
We know that by understanding the economic climate, you’re setting yourself up to weather any storm and grasp new opportunities before most have even identified them. At Panthera Consultancy, we not only pay attention to economic and financial events to help keep you informed, but we also support our customers in identifying those opportunities within their businesses every day!
With a business built on the expertise in banking and accountancy, when you count on us, you count on excellence.
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Now onto the updates:
ECONOMY
UK economy set to take off, Sunak claims: Prime Minister Rishi Sunak’s announcement about the UK economy taking off comes on the heels of significant tax cuts and a projected decrease in inflation. The second cut in National Insurance is expected to save the average worker £900 annually, contributing to increased consumer spending and economic activity. These tax cuts, amounting to £20bn per year, position the UK as offering lower personal taxes compared to other G7 countries, stimulating growth and employment opportunities.
UK becomes the world’s fourth-largest exporter: The UK’s ascent to the fourth position in global exports underscores its resilience and competitiveness in international trade. This achievement, surpassing France, the Netherlands, and Japan, is driven by robust services exports, reaching a record high of £470bn in the past year. Business and Trade Secretary Kemi Badenoch sees this as a testament to the UK’s trade strengths and aims to achieve exporting a trillion pounds of goods and services annually by 2030.
IMF warns BoE over interest rates: The International Monetary Fund’s cautionary note to the Bank of England highlights potential risks associated with interest rate policies. With a significant portion of UK homeowners on fixed-rate mortgages, there are concerns about declining consumption, potential house price falls, and increased defaults as tighter policy measures could come into effect. Managing interest rates amid economic recovery remains a critical balancing act for monetary policymakers.
Brexit border controls to cost UK businesses £2bn: The implementation of post-Brexit border controls is expected to have substantial financial implications for British businesses, amounting to an estimated £2bn in costs. These controls could lead to increased import costs, contributing to higher inflation rates across the country. While a two-year tariff suspension on certain goods may mitigate some of these costs, businesses are bracing for economic adjustments amidst evolving trade dynamics.
REAL ESTATE
Property market to bounce back this year: The optimism surrounding the property markets’ rebound is fuelled by not only increasing buyer demand but also by a notable rise in homes coming up for sale. The Royal Institution of Chartered Surveyors (Rics) reports positive indicators, signaling an improving outlook for property transactions and market activity in the near term. This positive sentiment is bolstered by factors such as favorable mortgage rates and government incentives aimed at stimulating the housing market, creating a conducive environment for both buyers and sellers.
First-time buyers more reliant on friends and family: Data from the Office for National Statistics highlights a growing reliance among first-time buyers on external financial support, particularly from family and friends. This trend underscores the financial challenges faced by individuals entering the housing market, where rising property prices and stricter lending criteria necessitate additional financial assistance to facilitate homeownership. The support from friends and family members plays a crucial role in bridging the gap for many first-time buyers, enabling them to access the property market amid affordability concerns.
Scotland’s commercial property sector sees investment spike: Scotland’s commercial property market experiences a significant surge in investment activity, marked by notable deals contributing to a 50% increase in investment volumes. This spike reflects investor confidence in Scotland’s real estate landscape, driven by strategic opportunities and growth prospects in key sectors. The commercial property sector’s resilience and attractiveness to investors underscore Scotland’s position as a favourable destination for real estate investments, fostering economic development and market dynamism in the region.
INTERNATIONAL
ECB holds interest rates steady: The European Central Bank’s decision to maintain interest rates comes amidst ongoing economic evaluations within the eurozone. With inflationary concerns persisting, the ECB’s stance reflects a cautious approach aimed at striking a delicate balance between supporting economic recovery and managing inflation pressures. The decision signals the ECB’s commitment to monitoring economic indicators closely and adopting appropriate monetary policy measures to navigate uncertainties and promote sustainable economic growth across member states.
US inflation rises to 3.5%: Inflationary pressures in the US continue to impact consumer prices, with a notable 3.5% increase over the past year. Factors such as rising fuel costs, housing expenses, dining out, and clothing prices contribute significantly to the overall inflationary trend. These trends not only influence monetary policy considerations but also affect consumer spending patterns, budgeting decisions, and overall economic sentiment. Policymakers and market analysts are closely monitoring inflation dynamics to assess their implications for economic stability and growth prospects.
US adds 300,000 jobs in blow to rate cut hopes: The robust job market performance in the US, characterised by the addition of 303,000 jobs last month, surpasses expectations and has immediate impacts on economic projections and monetary policy outlook. This strong employment data signals economic resilience, underscores workforce participation, and hints at potential wage growth trends. The positive job market indicators contribute to shaping investor sentiment and market expectations, potentially influencing decisions related to interest rate adjustments and economic stimulus measures.
Food inflation across rich nations drops to pre-Ukraine war levels: Recent OECD data reveals a notable decline in food inflation across developed nations, marking a return to pre-Ukraine war levels. This trend reflects the evolving dynamics of global supply chains, trade patterns, and market conditions impacting consumer pricing and inflation rates. The moderation in food inflation is a positive indicator for consumer purchasing power and overall economic stability, providing relief amid broader inflationary pressures in various sectors.
BANKING
Study warns of ‘lack of transparency’ over interest charges: A recent analysis has shed light on concerning transparency issues regarding interest charges in the banking sector. The study emphasizes that despite regulatory frameworks, not all customers receive the advertised rate, leading to significant disparities in interest charges among borrowers. This lack of transparency can have far-reaching implications, impacting consumer finances and highlighting the need for greater regulatory oversight and transparency standards within the banking industry.
Santander increases maximum term on interest-only mortgages: Santander’s decision to extend the maximum term on interest-only mortgages to 40 years reflects a strategic move to address evolving market dynamics and regulatory considerations. By offering longer-term options, Santander aims to enhance affordability for homeowners and provide flexibility in mortgage arrangements. These adjustments align with broader industry trends and regulatory frameworks, demonstrating a proactive approach to supporting homeownership and meeting customer needs in a changing financial landscape.
RETAIL
Retail sales climb 3.5%: The resilience of the retail sector is evident in the latest data showing a 3.5% increase in retail sales. Despite ongoing challenges such as supply chain disruptions and shifting consumer preferences, the sector continues to showcase positive growth momentum. This uptick in retail sales not only reflects consumer confidence but also underscores the sector’s vital role in driving overall economic activity. Robust retail performance contributes significantly to job creation, supply chain resilience, and revenue generation, fostering economic stability and growth.
CONSTRUCTION
UK construction industry returns to growth: Encouraging PMI data signals a notable rebound in the UK’s construction industry, marking a positive turn after a period of contraction. The growth trajectory in construction activity aligns with broader economic recovery trends, indicating increased investment, infrastructure development, and job creation within the sector. This resurgence in construction not only boosts economic output but also reflects renewed confidence among investors and industry stakeholders, boding well for sustained growth and development in the construction landscape.
CLOSING THOUGHTS
As we conclude this week’s edition, let’s take a moment to delve into the strategic insights highlighted by our top stories.
The UK’s rise to become the world’s fourth-largest exporter underscores our nation’s resilience and prowess in global trade dynamics, setting a strong foundation for future economic growth.
Meanwhile, the persistent inflationary pressures in the US, with rates hitting 3.5%, serve as a stark reminder of the complex challenges influencing global economies. These inflationary trends have far-reaching implications, impacting consumer behaviors and economic policies alike.
With more optimism i note the property market’s positive outlook signals encouraging opportunities for both buyers and sellers, reflecting a rebound in real estate activities and market confidence.
Are you ready to seize the opportunities ahead? Connect with us today and experience the Panthera Consultancy advantage firsthand.
Stay informed, stay ahead, and let’s navigate the financial landscape together.
Benjamin Vis
Managing Director – Head of Business Lending
Landline: 0208 132 6872
Mobile: 07933 145 994