SG Kleinwort Hambros’ Post

Data released this week will offer early evidence on whether the UK is on its way out of recession and guidance on when the Bank of England might consider cutting interest rates. Despite good news on growth, the country's unemployment rate has remained near historic lows, but some economists and commentators have noted the high levels of economically inactive people. The unemployment rate is expected to hold steady at 3.8%. Earnings data will also be closely watched as wages continue to rise too quickly for the Bank of England to control inflation. https://lnkd.in/eiKFwT3c #UKeconomy #BankofEngland #interestrates #unemployment #earnings

Rising wages and falling inflation are good for lower income households in the UK. Over the long-term, the benefits of automation and AI are expected to flow to those who are better off. https://smpl.is/96yw0 #FallingInflation #WageGrowth #HouseholdIncome

#Economic predictions this month of weak supply growth is a major reason the Monetary Policy Committee are keeping interest rates high. Good if you are a saver not so if you have a mortgage. The Bank of England are also clear, suggesting that the supply side of the economy, which includes the availability of labour, could maintain inflation stubbornly high over the next few years, driven mainly by pressures on wages. The answer? Do we need more people in the country? Or just get the people who aren’t working (who can) off benefits? As of October 2023, there were 1.57 million people claiming #unemployment benefits in the UK. Of these, it is estimated that around 400,000 are capable of working and could be placed in jobs within a short period of time. This means that around 25% of people claiming unemployment benefits are actually able to work. I’m sure it’s not that straightforward but that seems like the way forward to me. What are the other strategies the government could implement? The image is for comedic effect 😂😂

RECESSION IS HERE! Sky News this morning reporting the UK is officially in recession having seen a second successive contraction in the economy! What does this mean? This actually means that the UK economy has not grown or expanded for 2 quarters. Cost of living continues to rise. However, Unemployment remains low and wage growth continues to trickle through. All these factors would indicate that although officially a recession, it should be less extreme than the like of that seen in 2008. It’s an indicator that interest rates are starting to have an effect and may help to encourage the Bank of England to reduce rates sooner than otherwise expected, albeit this is unlikely to be any dramatic change. All told, it’s a headline to steal attention, a recession on paper. Otherwise it’s just the cost of living struggle continuing to play out. #recession #news #economy #economics #ukproperty #mortgagerates #interestrates #costofliving #propertyinvestor #scottishproperty #propertyinvesting #propertymarket

UK #economy grew more than estimated in early 2024 Revised figures from the Office for National Statistics (ONS) indicate that the #UKeconomy grew by 0.7% between January and March 2024, an upward revision from the initial estimate of 0.6%. This growth marks the UK's emergence from the #recession it entered in the final months of 2023. Steady GDP growth is widely desired as it usually signals increased #consumerspending, #jobcreation, higher #tax revenues, and better #payrises for workers. GDP and Its Impacts The faster GDP growth is mainly due to upward revisions in consumer spending. Despite increased spending, household saving rates also rose, reaching the highest level since mid-2021, reflecting improved disposable #incomes and #wage increases. Interest Rates and Future Economic Outlook #Interestrates are currently at a 16-year high of 5.25%, affecting borrowing costs for mortgages and loans. While savers benefit from higher returns, the high rates strain many households. The Bank of England has suggested it might cut rates in August, which would be the first reduction in over four years. However, many mortgage holders have already refinanced at higher costs, and additional households are expected to face increased repayments as fixed-rate deals expire over the next two years. While robust GDP growth may not expedite interest rate cuts, it does contribute to overall economic #optimism. Nevertheless, deep-seated productivity issues remain a more significant concern than the immediate interest rate outlook. In summary, while the UK economy has shown signs of #recovery, many households continue to face financial pressures due to rising costs and high interest rates. If you're looking to recruit / looking for a new role in the #manufacturing, #engineering or #supplychain industries, get in touch today! Call: 0151 480 2300 Email: recruit@morganryder.co.uk #follow Morgan Ryder on #linkedin Visit our website: morganryder.com Celebrating 20 years of world class #manufacturing Credit: https://lnkd.in/e6ERSJcz

The UK economy shrank by more than expected in October, as higher interest rates squeezed consumers and bad weather swept the country. The economy fell by 0.3% on the month, after growth of 0.2% in September. #economy #interestrates #inflation #yourmoney https://lnkd.in/e4-Tz6t8

Is it time to rethink interest rate cuts... again? 🤔 📊 Recent CPI data shows stability, but not the decline the BoE needs to lower interest rates. As we navigate a stagnating UK economy, the key question is: will enduring high rates hinder recovery? Unexpectedly, unemployment is up to 4.2% from 3.9%. Yael Selfin, chief economist at KPMG UK, said the rise in the unemployment rate and the latest slowing of pay pressure suggested the labour market was generating less inflation. "The slight easing in regular pay growth will bring some comfort for the Bank of England which has relied on the pay data as a key gauge of domestic inflationary pressure," Selfin said. For those in property and development, this mixed economic picture means loan rates may not ease up soon, impacting your plans. 🔗 https://hubs.la/Q02t98SP0 How are you adjusting your plans in this economic landscape? #UKInflation #InterestRates #PropertyInvestment

Thursday Thought... Storm Babet caused more than just weather problems! The UK economy shrank by more than expected in October, as higher interest rates squeezed consumers and bad weather swept the country. The economy fell 0.3% during the month, after growth of 0.2% in September. Household spending has been dented by rate rises as the Bank of England tries to tackle inflation. It is due to make its next rate decision on Thursday. Meanwhile, retail and tourism were hit by severe weather in October as Storm Babet lashed the UK. #economics #economicdevelopment #economicgrowth #economicoutlook

📊 UK Inflation : A 2% Steady Climb and Its Implications In the year to June 2024, the UK’s inflation rate held steady at 2%, the lowest in nearly three years. This stability brings mixed news. The Bank of England’s interest rate hike to 5.25% aimed to control inflation, making borrowing expensive to cool spending. However, while inflation is at target, core inflation at 3.5% suggests underlying price pressures persist. What Does This Mean for the UK? 1.Economic Balance: The balance between controlling inflation and avoiding economic slowdown remains delicate. High interest rates can deter borrowing and spending, impacting growth. 2.Consumer Impact: While inflation at 2% signals price stability, higher interest rates mean increased mortgage costs and expensive loans, affecting disposable income and saving behavior. 3.Market Expectations: Although the Bank held rates, a cut is anticipated later this year. This potential reduction could stimulate spending but might reignite inflationary pressures. 4. Homeowners and Borrowers: Homeowners with variable-rate mortgages will feel the pinch as their monthly payments increase. This could lead to financial strain for some families, especially those already on tight budgets. 5. Savers and Investors: On the positive side, higher interest rates benefit savers, offering better returns on savings accounts. For investors, the environment remains uncertain, balancing between potential growth and the risk of economic slowdown. 6.Employment and Wages: With wages rising faster than inflation, real incomes are improving, which is crucial for maintaining living standards. However, businesses may face higher costs to retain talent, potentially leading to higher prices or reduced hiring. 7.Cost of Living: The cost of living remains a concern as inflation, although lower, still means prices are rising. Households will need to manage their budgets carefully, prioritizing essential spending. Economic Landscape: 1.Stable Prices, Uneven Impact: While the overall inflation rate has stabilized, prices for essential services like hotels, cinemas, and package holidays have increased. Conversely, clothing and footwear have seen price drops, and food inflation has eased, but not uniformly. 2.Interest Rates at 5.25%: The Bank of England’s decision to maintain interest rates at 5.25% reflects ongoing concerns about inflation’s underlying pressures. Higher interest rates mean higher borrowing costs, affecting mortgages and loans, which can reduce disposable income and limit spending power. #UKEconomy #Inflation #InterestRates #FinancialPlanning #EconomicOutlook #CostOfLiving #linkedin #linkedinnews LinkedIn LinkedIn News UK LinkedIn News Financial Times UK Finance BBC BBC News

UK Unemployment Starts to Creep Up! After Bank of England confirmed a hold in interest rates at 5.25%, this further paints us that picture that no movement in these rates will come until UK inflation is consistently at or below 2%. In turn, other parts of the economy will suffer immensely. Unemployment reaches 4.3% today further confirming a squeeze on the UK labour market. The longer the interest rates are held high, the higher we can expect to see Unemployment increase along with a further strain on our housing market too. #ukunemployment #ukeconomy