Welcome to Your Panthera Consultancy Weekly Newsletter!
This week, we bring you insights into expected changes in interest rates, the latest unemployment data, developments in the real estate market, and key news in the banking and financial services sectors. As always, Panthera Consultancy is here to assist you and your business in navigating the evolving financial landscape.
LAST CHANCE: It could be your businesses last chance to benefit from the Recovery Loan Scheme, a government backed loan that can be in the form of Asset Finance, Invoice Finance or Unsecured Lending. As these loans are backed 70% by the government, lenders are providing these facilities with lowest on the market fees! This scheme ends on the 30th of June 2024 so if your business is looking for lending, don’t miss out and get in touch Today!
Email: info@pantheraconsultancy.com
Phone: 0208 132 6872
Now, to the updates:
ECONOMY
Bank to Cut Interest Rates in August, Say Economists
The Bank of England is expected to start cutting interest rates in August, according to a poll of economists. Despite high pay and services inflation, most economists anticipate at least one more rate reduction this year. They predict two 25 basis point reductions to 4.75% by the end of 2024. UK inflation is expected to average slightly above the bank’s target of 2% until at least the end of 2025. The economy is forecast to grow 0.3% in every quarter until the end of 2025.
Unemployment Rate Climbs to 4.4%
Office for National Statistics (ONS) data shows that the unemployment rate climbed to 4.4% in the three months to April, up from 4.3% the month before. This marks the steepest increase since September 2021. Regular earnings, excluding bonuses, rose at an annual pace of 6%, the same as the previous month. With inflation stripped out, pay increased by 2.9%—the highest rate since August 2021. The number of job vacancies fell by 12,000 to 904,000 in the three months to May. Luke Bartholomew, deputy chief economist at Abrdn, commented, “UK wage growth remains very strong, but with further evidence that the labour market is cooling, this report is unlikely to significantly change the thinking at the Bank of England.”
Next Government Will Inherit an Improving Economy
Jeremy Warner in the Sunday Telegraph suggests that while Shadow Chancellor Rachel Reeves has warned that a Labour government will face the worst economic inheritance since the war, the economy as a whole is actually improving. Q1 growth was higher than expected, business investment has picked up sharply, and inflation has come down. Warner adds that interest rates will soon follow suit and real wages are rising. He believes that the trend of economic improvement will continue regardless of a change in government.
REAL ESTATE
First-Timers Take Longer to Get on the Ladder
Analysis from Santander shows that almost one in five first-time buyers are 40 or over. The rising cost of properties and mortgages means that those getting onto the property ladder have to save for longer. Data from UK Finance shows that the number of first-time buyers fell 22.4% to 287,430 last year, the lowest since 2013. The average price of a property bought by a first-time buyer has risen 50% since 2015.
Moving Home Costs Soar to £51,784
A study reveals that the average person’s relocation expenses have increased to £51,784, with most needing to make unforeseen payments of around £6,000. The mortgage deposit makes up a large portion of the cost, averaging £42,416, or 15% of the house value.
New Home Loans Surge
Figures from the Financial Conduct Authority show a surge in new home loans, indicating strong demand among buyers. The value of new mortgage commitments in the past three months reached £60.1bn, up 30.8% from the previous quarter. However, the total value of mortgages in arrears rose by 44.5% to £21.3bn, possibly due to higher interest rates.
BANKING
Mortgage Arrears Up in Q1
The number of mortgages in arrears increased to 1.28% in Q1, according to figures from the Bank of England. This is up from 1.23% in the final quarter of 2023, reaching the highest proportion since the end of 2016. The value of outstanding mortgage balances with arrears increased by 4.2% quarter-on-quarter, hitting £21.3bn.
Over £366bn in UK Accounts Earning 1% or Less
More than £366bn is sitting in UK current and savings accounts earning returns of 1% or less, according to a report from Yorkshire Building Society. Nearly 13m current accounts in Britain have balances above £5,001, with an average balance of £23,700.
Banks Expand into Fintech to Compete with Challengers
UK’s major banks are venturing into the fintech space to compete with younger challengers and tap into the lucrative market. Strategies include software licensing, embedded banking, and acquiring fintech companies. For example, Starling’s software-as-a-service unit, Engine, white-labels its software platform to banks in other countries, earning monthly subscription fees.
Firms Urge PSR to Delay Fraud Refund Rules
Firms have urged the UK payments regulator to delay new fraud reimbursement rules. The new regulations will force banks and other payment firms to reimburse victims of authorised push payment (APP) fraud up to £415,000 per claim from October. The Payments Association is lobbying to delay the new rules by a year and to lower the refund threshold to £30,000.
Co-op Offers Switching Bonus
The Co-operative Bank has launched a limited-time switching bonus worth up to £150 for new customers who move their current account to the bank. Other banks offering switching bonuses include First Direct, Lloyds, Santander, TSB, and Nationwide.
Bank Glitch Takes Payments Twice
The Co-operative Bank has apologised after a glitch caused some small business account holders to have payments taken twice. Only a small number of its 96,000 small business customers were affected.
FINANCIAL SERVICES
Home Insurance Premiums Soar
Households in the UK face the largest increase in home insurance premiums on record, with extreme weather events being a major factor. Quoted premiums have risen by 42% over the past year, the highest annual increase in a decade. The true average cost is closer to £400, according to the Association of British Insurers.
Ministers Urged to Prioritise Economic Growth in Regulators’ Mandates
City Minister Bim Afolami has called on the next government to prioritise economic growth in the mandates of independent regulators. He believes regulators should consider economic growth alongside market safety and soundness. The government has criticised the Financial Conduct Authority’s proposal to name companies under investigation, warning that it could deter businesses from investing in Britain.
SPORT
Barclays Set to Score Premier League Deal
Barclays is on the verge of renewing its long-standing link to the Premier League with a £75m deal, surpassing the value of its current partnership. The proposed four-year agreement is worth approximately 60% more each year. Barclays has had a lengthy connection with the Premier League and previously served as its title sponsor.
CLOSING THOUGHTS
As we conclude this week’s Panthera Consultancy Weekly Newsletter, we highlight the expected interest rate cuts by the Bank of England and the increase in unemployment rates, what does this mean for your business? Potentially opportunities for growth on the horizon with lending products fee’s likely to dip or better talent for your business with less a less competitive job market.
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!
Ow yess, and before i forget… just a reminder… IT’S COMING HOME! Enjoy the football!
With my kindest regards,
Benjamin Vis
Managing Director – Head of Business Lending
Landline: 0208 132 6872
Mobile: 07933 145 994