Welcome to Your Panthera Consultancy Weekly Newsletter!
This week, we bring you insights into the growing confidence in the UK economy, the rebound in the housing market, and key developments in international finance and the banking sector. We also cover significant news in manufacturing, healthcare, and hospitality, ensuring you stay informed about the latest trends and challenges. As always, Panthera Consultancy is here to assist you and your business in navigating the evolving financial landscape.
Email: info@pantheraconsultancy.com
Phone: 0208 132 6872
Now, to the updates:
ECONOMY
Confidence in UK Economy Reaches Three-Year High
Confidence in Britain’s economic prospects has risen to its highest level in three years, according to a survey by the Institute of Directors. The economic confidence index rose to -3 in May, up from -10 in April. Business leaders’ investment intentions and headcount expectations have also improved. However, export expectations are declining, with the biggest concerns being economic conditions and skills shortages. Roger Barker, director of policy and corporate governance at the institute, noted, “Green shoots are visible and the direction of travel is positive, but there are no grounds for complacency.”
CBI: UK Economy is ‘Picking Up Steam’
The UK economy is “picking up steam” as households start to feel better off, according to the Confederation of British Industry (CBI). The CBI has upgraded its GDP growth forecast for this year from 0.8% to 1% and for next year from 1.6% to 1.9%. Falling inflation is expected to lead to a Bank of England interest rate cut in August. However, Alpesh Paleja, CBI lead economist, emphasised the need to do more to achieve sustainable growth.
REAL ESTATE
House Prices Edge Back Up as Market Begins Rebound
UK house prices have experienced a modest rebound, increasing by 0.4% in May, according to Nationwide. Annually, house price growth has seen a 1.3% uptick since last April, with prices now averaging £264,249. Nationwide’s chief economist, Robert Gardner, commented, “The market appears to be showing signs of resilience in the face of ongoing affordability pressures.”
INTERNATIONAL
ECB Cuts Interest Rates for First Time in 5 Years
The European Central Bank has cut interest rates by a quarter-point to 3.75% – the first cut in nearly five years. Despite this, the central bank warned that inflation remains challenging, making another rate cut in July unlikely. The ECB now expects inflation to average 2.5% this year.
BANKING
Mortgage Borrowing Rises to Highest Level Since October 2022
Individuals in the UK borrowed a net £2.4bn on mortgages in April, a significant increase from the previous month’s £500m. This surge, the highest since October 2022, suggests that prospective homebuyers rushed to secure lower interest rates. The Bank of England data indicates that the drag on mortgage lending from higher interest rates is fading.
UK Finance Calls for Champion to Tackle Over-Regulation
UK Finance has recommended the creation of a dedicated “competitiveness champion” to review and tackle financial regulations that hinder the international competitiveness of the UK financial services sector. This champion would produce an annual report to parliament on regulatory burdens and barriers to growth.
FINANCIAL SERVICES
Car Insurance Premiums for Young Drivers Soar to Over £3,000
Car insurance premiums for newly qualified young drivers have reached an all-time high of over £3,000, according to Compare The Market. The average premium for a 17-year-old who has just passed their driving test is now £3,075, compared to £2,004 last year. This rise is attributed to parts shortages and an increase in vehicle thefts.
RETAIL
Cost Pressures and Poor Weather Stifle Retail Sales
Retail sales remained sluggish last month as wet weather and rising household bills kept consumers cautious. According to the British Retail Consortium (BRC), total retail sales rose by just 0.7% over the year to May. Helen Dickinson, chief executive of the BRC, said, “Minimal improvement to weather across most of May meant only a modest rebound in retail sales last month.”
MANUFACTURING
UK Manufacturing Expands at Fastest Pace in Over Two Years
Output in the UK’s manufacturing sector expanded at the fastest pace in over two years in May, according to a survey by S&P. The purchasing managers’ index (PMI) rose to 51.2, indicating expansion, with firms reporting greater intakes of new work and higher levels of production.
HEALTHCARE
London Hospitals Hit by Cyber-Attack
Three major London hospitals have been hit by a ransomware attack, leading to chaotic scenes in A&E and delays in other services. The National Cyber Security Centre (NCSC) is investigating the source of the attack, which targeted Synnovis, a private company providing pathology services to large hospitals and GP surgeries in the capital.
LEISURE & HOSPITALITY
New Tips Law Will Drive Up the Price of a Pint
New research suggests hospitality businesses could respond to a new law requiring them to pass on all tips to staff by imposing a service charge on drinks. The Employment Allocation of Tips Act could see the average price of a pint rise to over £7 in London.
CONSTRUCTION
Construction Activity Rises
The UK construction sector’s recovery gathered pace in May as it grew at the fastest rate for two years, according to new data. The S&P Global construction purchasing managers’ index (PMI) scored 54.7 in May. Andrew Harker, economics director at S&P Global Market Intelligence, stated that the rise in activity was broad-based, with housing projects seeing growth for the first time in over a year and a half.
CLOSING THOUGHTS
As we conclude this week’s Panthera Consultancy Weekly Newsletter, we highlight the optimism coming from the UK’s economic confidence reaching a three-year high and the rebound in house prices. Despite these positive signs, challenges remain, particularly in the banking sector with the need for regulatory reform to boost competitiveness. This underscores the importance of having a strategic financial partner like Panthera Consultancy to help navigate these complexities.
If you’re interested in finding out how your business could benefit from these developments, get in touch with us today and see what finance options could be available to you!
Email: info@pantheraconsultancy.com
Phone: 0208 132 6872
Thank you for being a valued reader. Until next week, stay informed and stay ahead!
With my kindest regards,
Benjamin Vis
Managing Director – Head of Business Lending
Landline: 0208 132 6872
Mobile: 07933 145 994