Welcome to our Weekly Digest – stay in the know with some recent news updates relevant to business and the economy.
UK economy contracts in September in blow to Reeves’ growth push
Britain’s economy contracted unexpectedly in September and growth slowed to a crawl over the third quarter, data showed on Friday, an early set back for finance minister Rachel Reeves’ ambitions to kick-start a sustained pickup.
Billions at stake in court battle over North Sea oil
How much oil – and how much profit – remain beneath the waters that buffet the British Isles? Going by the number of lawyers packed into the Court of Session in Edinburgh this week, it must be a decent amount.
UK economy stalls – what that means for you and your money
Chancellor Rachel Reeves has said she is “not satisfied” with the performance of the UK’s economy after it grew by a meagre 0.1 per cent in the three months to the end of September. Economists had expected 0.2 per cent growth during the period – in itself hardly a stellar performance, and it comes after 0.5 per cent growth during the previous three months. The growth figure is a problem because of the government’s dependency on a growing economy to gather more tax.
Housing market rebounds after budget as buyer demand surges
Despite pre-budget apprehension, the housing market outperformed expectations, according to the latest survey by the Royal Institution of Chartered Surveyors. Of the 269 estate agents polled, a majority reported more sales in October compared to September, driven in part by buyers seeking to complete transactions ahead of potential budget-related tax change
30 October budget puts financial strain on SMEs
As of the 30 October budget, the UK government has raised employer National Insurance contributions from 13.8% to 15%, marking one of the highest rates on record in recent times. Coupled with a 6.7% increase in the minimum wage for over-21s, now set at £12.21 per hour, these shifts pose a formidable financial challenge for SMEs, many of which operate on tight budgets.
Faster wage growth means little chance of a December rate cut
The stability of private sector regular wage growth suggests the Bank of England (BoE) will only cut interest rates gradually. Our base case is that the Monetary Policy Committee (MPC) will cut rates once a quarter next year, but a second Trump presidency raises the risk of fewer rate cuts.
Industry reaction to latest UK GDP data
Following the latest UK GDP data that showed a growth of just 0.1% in the three months to September – less than the 0.2% expected – with the economy contracting 0.1% in September, industry experts have shared their thoughts.
Cost and risk of employment is hampering UK growth prospects
Commenting on the release of ONS labour market data, Alexandra Hall-Chen, Principal Policy Advisor for Employment at the Institute of Directors, said: “The small decreases in the number of payrolled employees and vacancies point to a concerning trend of employer caution regarding hiring staff.”
Middle East conflict impacts half of UK firms
Half of UK businesses say they have been impacted by the conflict in the Middle East. This is almost double the proportion (26%) who said they were affected in late October 2023. The main impacts cited by businesses are increased costs, shipping disruption and delays, and uncertainty on oil prices.
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