Panthera Consultancy Weekly Newsletter
Welcome to Your Panthera Consultancy Weekly Newsletter!
In this week’s edition, we bring you important updates: the UK jobs market shows signs of cooling, the housing market experiences a modest rise, and fears of a US recession impact global markets. We also cover developments in the banking sector, construction industry, and automotive market. Stay informed and ahead of your business needs with Panthera Consultancy.
Understanding these stories helps you navigate the complexities of the financial landscape. Whether it’s shifts in the job market, changes in the property sector, or global economic trends, these factors can influence your business decisions. If you know others who could benefit from this newsletter, share it with them and tell them to email ‘join’ to info@pantheraconsultancy.com.
Lastly, if you’re looking to expand your business, don’t wait for opportunities—create them! Panthera Consultancy is here to assist with your growth strategies, whether it’s securing finance, managing foreign exchange, or planning for new projects. Get in touch today to discover how we can support your business goals!
Email: info@pantheraconsultancy.com
Phone: 0208 132 6872
Now to the Updates:
ECONOMY
Cooling Jobs Market Raises Rate Cut Possibility
The prospect of the Bank of England cutting interest rates further has increased following a report from the Recruitment and Employment Confederation, indicating that the UK jobs market is cooling. The pace of pay rises slowed last month, with both temporary and permanent staff hiring declining. Vacancy numbers also fell for the ninth consecutive month. These developments will be closely monitored by the Bank of England, which recently cut interest rates after inflation dropped to its 2% target. Governor Andrew Bailey had previously expressed concern over wage growth fuelling inflation, influencing the Bank’s decisions on interest rates.
Economy Fared Better in 2022 Than Previously Thought
Revised figures from the Office for National Statistics (ONS) reveal that the UK economy grew by 4.8% in 2022, exceeding earlier estimates. This growth, driven by the transport, professional, and business support services industries, indicates resilience despite facing challenges like double-digit inflation and political instability. The revised data reflects the post-COVID-19 economic landscape, with significant impacts on healthcare, hospitality, and accommodation sectors.
Raising CGT Would Put Growth at Risk
The National Institute of Economic and Social Research (NIESR) has advised the Chancellor against increasing capital gains tax (CGT), arguing it could deter private investment. Instead, NIESR suggests increasing government investment to 5% of GDP and introducing a new tax on land. They also recommend excluding capital investment from borrowing rules and fostering closer ties with the EU to boost growth. The NIESR’s outlook suggests that annual GDP growth may struggle to exceed 1.3% in the coming years, well below the 2.5% target set by the Chancellor.
REAL ESTATE
UK House Prices Rise by 0.8% in July
UK house prices saw a modest increase of 0.8% in July, with the average property price rising by over £2,200 compared to June, according to Halifax. The housing market appears resilient, supported by the recent interest rate cut by the Bank of England. Despite challenges such as affordability constraints and a limited supply of properties, experts remain optimistic about continued growth, albeit at a modest pace.
Property Sales Set to Pick Up, Surveyors Say
Surveyors are predicting an increase in property sales this autumn, according to the Royal Institution of Chartered Surveyors (RICS). Expectations for a rise in sales have reached their highest level since early 2020, with surveyors anticipating more activity in the coming months. However, challenges remain, including the ongoing need for planning reforms and uncertainty over future interest rate decisions by the Bank of England.
Landlords Selling Up Amid CGT Raid Fears
Concerns over a potential capital gains tax (CGT) increase are prompting many landlords to sell their properties. RICS reports a 16% decline in new landlord instructions across the country, as fears of an “unfair” tax regime and increasing legislation make buy-to-let investments less attractive. The Chancellor could consider raising CGT rates to match income tax, further fuelling these concerns.
L&G Warns Tackling Housing Crisis Will Take a Decade
Legal & General (L&G) has warned that addressing the UK’s affordable housing crisis could take over a decade at the current pace of construction. L&G has partnered with the Greater Manchester Pension Fund to boost funding for low-cost housing, with a £120m investment adding to their affordable housing fund. Despite this, the scale of the housing crisis suggests a long road ahead.
INTERNATIONAL
Markets Tumble on US Recession Fears
Concerns over a potential US recession have led to a downturn in Asian markets, with investors turning to bonds as a safe haven. Weak jobs data from the US has fuelled these fears, prompting analysts at Goldman Sachs to increase the odds of a recession to 25%, with JPMorgan putting it at 50%. Markets are also pricing in a high likelihood that the Federal Reserve will cut rates by 50 basis points in September, reflecting the uncertain economic outlook.
BANKING
Metro Bank Turns Attention to Business Customers
Metro Bank is shifting its focus towards small business and corporate customers, according to CEO Dan Frumkin. The bank plans to open new stores only if they align with this strategy, avoiding the approach of previous leadership which prioritised store expansion.
Metro to Stop All Credit Card Services
Metro Bank has announced it will discontinue all credit card services from 10th September. Customers will no longer be able to make purchases or withdrawals using their Metro Bank credit cards after this date. Those with ongoing payments linked to their credit cards will need to update their payment details to an alternative card.
HSBC and Barclays Slash Rates to Below 4%
A new mortgage price war is underway, with HSBC and Barclays launching sub-4% deals. HSBC offers a five-year fixed rate of 3.92% for premier banking customers with a 40% deposit, while Barclays offers a rate of 3.83% for similar customers. These competitive rates are expected to stimulate the housing market by making mortgages more accessible.
Repossessions Rise by 31%
The number of home repossessions in the UK has risen by 31% year-on-year in Q2, according to UK Finance. The increase in mortgage possession claims reflects growing financial pressure on homeowners. Despite the rise in repossessions, the overall proportion of mortgages in arrears remains relatively low at 1.10% for homeowner mortgages and 0.69% for buy-to-let properties.
British Business Bank Invests £2bn
The British Business Bank (BBB) has committed a record £2.3bn in funding for 2023/24, supporting the creation of nearly 40,000 new jobs and contributing £8.4bn to the UK economy. The BBB is exploring ways to increase institutional investment in the UK, with plans to align with the UK Infrastructure Bank under a new National Wealth Fund, recently announced by the Chancellor.
FINANCIAL SERVICES
Motor Insurance Premiums Rise Despite Quarterly Decline
Motor insurance premiums have increased by over 20% in the past year, despite a 2% dip in average prices during the second quarter. The average cost of car insurance fell to £622, down from a record high of £635 in the previous quarter, but remains significantly higher than last year. The Association of British Insurers (ABI) attributes the rise to increasing claims costs, higher prices for spare parts, and supply chain issues.
RETAIL
Warm Summer Weather Boosts Retail Sales
The arrival of warm weather in the UK has led to a recovery in retail sales, with total sales increasing by 0.5% year-on-year in July. Consumers spent more on summer clothing and health and beauty products, while spending on furniture and household appliances declined. Data from Barclays indicates a decline in overall consumer card spending, with discretionary spending becoming more selective.
CONSTRUCTION
UK Construction Sector Grows at Fastest Pace Since 2022
The UK construction industry experienced its fastest growth in over two years, with the sector seeing a strong recovery driven by new housing projects. The purchasing managers’ index (PMI) for the industry reached 55.3 in July, indicating robust expansion. Growth was recorded across all key areas of the sector, including housing, commercial building, and civil engineering, marking the fifth consecutive month of growth.
AUTOMOTIVE
Sales of EVs Expected to Grow More Slowly Than Expected
The Society for Motor Manufacturers and Traders (SMMT) has revised down its forecast for electric vehicle (EV) sales, now predicting that they will account for 18.5% of the new car market in 2024, down from the previous estimate of 19.8%. Despite the slower growth forecast, EV sales surged by 18.8% in July. However, private consumers’ share of EV purchases has declined, with car makers calling for more government support to accelerate the transition to electric vehicles.
CLOSING THOUGHTS
Thank you for being a valued reader of the Panthera Consultancy Weekly Newsletter. We strive to provide you with timely and relevant financial updates to help you stay ahead in this ever-evolving economic landscape. As we continue to navigate these uncertain times, remember that Panthera Consultancy is here to support your business in more ways than one.
If you’re considering how to drive growth in your business, our expertise in business lending could be the key to unlocking new opportunities. Whether it’s financing for expansion, investment in new projects, or simply strengthening your working capital, we can tailor lending solutions to suit your specific needs.
Additionally, for those involved in international trade or requiring foreign exchange services, we offer competitive rates and strategic advice to ensure you maximise your savings and manage currency risks effectively. Our team is dedicated to helping you achieve the best possible outcomes, ensuring your business remains resilient and competitive in the global market.
Don’t hesitate to get in touch with us to explore how we can help your business thrive. We’re here to provide the guidance and support you need to achieve your financial goals.
Until next week, Stay Informed & Stay Ahead
With my kindest of regards,
Benjamin Vis
Managing Director – Head of Business Lending
Landline: 0208 132 6872
Mobile: 07933 145 994