Economic Review – September 2025

UK inflation remained at an 18-month high of 3.8% in August, driven by food prices. Above the BoE 2% target UK GDP growth fell to 0.2% in the three months to July and output failed to grow at all in July In the UK jobs market payrolls fell for the seventh consecutive month and wage growth slowed to the lowest rate since May 2022 

Inflation stays at 18-month high  

Data released last month by the Office for National Statistics (ONS) showed that a surge in food prices kept the headline rate of inflation at its highest level since January 2024. 

The latest official inflation statistics revealed that the Consumer Prices Index (CPI) 12-month rate – which compares prices in the current month with the same period a year earlier – remained unchanged in August at 3.8%. This reading was in line with the consensus view from a Reuters poll of economists.  

ONS said inflation across the food and non-alcoholic drinks sector rose for a fifth consecutive month, with prices 5.1% higher than a year earlier, as the cost of beef, butter, milk and chocolate all continued to surge. The increase in food costs, however, was offset by slowing price growth in other areas, most notably air fares. 

The latest data leaves inflation significantly above the Bank of England’s 2% target and, a day after release of the consumer price statistics, the Bank’s Monetary Policy Committee (MPC) voted to leave Bank Rate on hold at 4.0%, as analysts had expected. 

Speaking after announcing the decision, Bank Governor Andrew Bailey warned that the UK was not yet “out of the woods” when it came to inflation. He also reiterated his view that any future rate cuts would need to be made “gradually and carefully”, adding that, while he did expect further reductions, their timing and scale was now “more uncertain”. 

The MPC is due to meet twice more this year, with the next decision scheduled for 6 November. Although a Reuters poll conducted last month did find that a majority of economists do still expect one more rate cut this year, it does increasingly appear to be a close call, with a growing proportion of respondents predicting no further reductions until the first quarter of 2026. 

Data points to weaker growth momentum 

Official figures published last month revealed a further slowdown in economic output at the outset to the second half of the year, while survey data points to a more recent loss of economic momentum across the private sector. 

According to the latest ONS statistics, the UK economy grew by 0.2% during the three months to July. This figure, however, does represent a notable slowdown from a relatively robust first-quarter growth rate of 0.7% and a 0.3% expansion recorded across the second quarter of the year.  

The data also revealed that the economy actually failed to grow at all in July. While the services sector did witness some growth, edging up by 0.1% on the month, this was offset by a 1.3% decline in manufacturing output, the sector’s sharpest monthly contraction for a year.  

Survey evidence also suggests July’s slowdown is likely to be the start of a more restrained period of growth. Last month’s preliminary headline figure from the closely-monitored S&P Global UK Purchasing Managers’ Index (PMI), for instance, fell to a four-month low of 51.0 in September, down from a final reading of 53.5 in August. While these figures do suggest some expansion in private sector output across both of the final two months of the third quarter, the implied rate of growth is only relatively modest, particularly in relation to September.  

Commenting on the findings, S&P Global Market Intelligence’s Chief Business Economist Chris Williamson said the survey brought “a litany of worrying news”, including “weakening growth”. And he added, “Amid talk of further tax rises being needed in the Budget later this year, it’s not surprising to see that business expectations have worsened again in September, and in the absence of an improvement in confidence, it’s unlikely that the economy will make any strong gains in the months ahead.”  

Markets  

At the end of September, global markets delivered largely positive performances, with equities across major regions advancing and safe-haven assets strengthening. Gains were seen in UK, US, European and Japanese indices, while gold surged and oil prices stalled amid geopolitical tensions. 

On home shores, the blue-chip FTSE 100 closed the month on 9,350.43, a gain of 1.78%. The mid-cap FTSE 250 gained 1.90% in September to end on 22,015.56, while the small-cap orientated FTSE AIM registered a 2.50% gain to close September on 783.17. 

In the US, the Dow Jones closed the month on 46,397.89, an uptick of 1.87% in the month. The tech-orientated NASDAQ closed the month up 5.61% on 22,660.01, the best third quarter since 2020 and best September performance since 2010. On the continent, the Euro Stoxx 50 gained 3.33% during September to end on 5,529.96. In Japan, the Nikkei 225 gained 5.18% to close the month on 44,932.63. 

On the foreign exchanges, the euro closed the month at €1.14 against sterling. The US dollar closed at $1.34 against sterling and at $1.17 against the euro.  

The gold price rose 10.30% during September, closing at around $3,870 a troy ounce, as ongoing economic uncertainty and lower interest rates contributed to the safe haven’s latest rally. Brent Crude closed the month at around $66 a barrel, recording no gain on the month. The price faltered at month end as traders continue to worry about oversupply, as well as new developments in the Israel-Gaza conflict. 

Jobs market loses a little more steam 

The most recent batch of labour market data provided further evidence of a softening in the UK jobs market with the number of workers on firms’ payrolls falling for a seventh consecutive month and pay growth edging lower. 

Statistics released last month by ONS showed demand for workers continued to wane over the summer, with the number of payrolled employees in the May – July period 51,000 lower than the level recorded in the previous quarter. Early estimates suggest the number decreased by a further 8,000 in August. 

The data release also revealed a slowdown in wage growth with average weekly earning, excluding bonuses, rising at an annual rate of 4.8% in the three months to July, down from 5.0% in the previous three-month period. This represents the slowest rate of pay growth since May 2022. 

ONS said its latest set of statistics showed the labour market ‘continues to cool’ with firms noting ‘fewer jobs’ were available. The statistics agency, however, also acknowledged signs that the rate of decline may now ‘be slowing’. For instance, the number of vacancies in the June – August period actually rose slightly from the previous month’s figure, the first increase on this metric since February last year. 

August retail sales beat expectations 

While survey data released last month continued to highlight a relatively tough retail environment, the latest official statistics did report stronger-than-expected growth in sales volumes. 

Figures published recently by ONS showed that total retail sales volumes rose by 0.5% in August. This followed a similar-sized increase in July and was slightly higher than the 0.3% consensus prediction from a Reuters poll of economists. ONS noted that sunny weather had provided a boost to sales during August. 

The data, however, also revealed that sales in the three months to August actually declined by 0.1%, compared to levels recorded across the previous three-month period. In addition, evidence from the latest CBI Distributive Trades Survey found that retailers typically judged September’s sales to be ‘poor’ by seasonal norms, while respondents said they expect the situation to worsen in October as weak consumer demand continues to weigh on sales. 

Last month’s GfK consumer confidence survey also points to potentially tougher conditions for the retail sector with its headline index falling to -19 in September from -17 in August as all five measures of sentiment dipped. A GfK spokesperson added, “With tax rises expected in the November budget, the risk is that confidence inevitably falls”. 

All details are correct at the time of writing (01 October 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from, taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission. 

News in Review

OECD forecasts slower global growth ahead due to tariffs, trade barriers and policy uncertainty  The UK economy faces a weaker outlook with highest G7 inflation in 2025, easing slightly in 2026 Labour signals fiscal prudence, hints at tax rises, while pledging support for youth employment initiatives 

‘Finding the right balance in uncertain times’ 

The Organisation for Economic Co-operation and Development’s (OECD’s) latest Economic Outlook, released last week, projects global growth of 3.2% this year, easing to 2.9% by 2026, following growth of 3.3% in 2024. The slowdown reflects the drag from rising tariffs and persistent policy uncertainty, which are weighing on trade and investment. 

The report, ‘Finding the right balance in uncertain times,’ notes that the global economy showed resilience in the first half of the year, but warns that the full effects of tariff increases are still being felt. As stockpiled goods are drawn down and new measures take hold, the impact on growth is expected to become clearer in the months ahead. 

Geopolitical tensions, shifting policy priorities and higher trade barriers all represent meaningful risks. Looking ahead, OECD Secretary-General Mathias Cormann suggests, “To strengthen economic growth prospects, a key priority is to ensure a lasting resolution to trade tensions. We recommend that governments engage productively with one another to make international trading arrangements fairer and function better, in a way that preserves the economic benefits of open markets and rules-based global trade.” 

Looking at the UK, the OECD predicts growth of 1.4% this year and 1.0% in 2026. This weaker outlook is attributed to a ‘tighter fiscal stance’ plus increased trade costs and ongoing uncertainty. The OECD anticipates that headline inflation in the G20 economies will be 3.4% in 2025, whilst the UK’s forecast sits slightly higher at 3.5%, the highest among the G7 nations. UK inflation is predicted to fall to 2.7% next year, although still the second-highest in the G7.  

Global leaders come together at UN General Assembly  

The 80th session of the United Nations General Assembly (UNGA) kicked off last week at the UN Headquarters in New York. Running from 22-30 September, the key theme this year was, ‘Better together: 80 years and more for peace, development and human rights.’ Representatives from all 193 member states gathered to discuss global issues during the General Debate.  

Reeves promises prudence amid tough choices 

At Labour’s annual conference in Liverpool, Chancellor Rachel Reeves acknowledged the government faces “difficult choices,” stressing she “will not take risks with the public finances.” She promised to keep “taxes, inflation and interest rates as low as possible,” but hinted at possible tax rises in November’s Budget, citing “international events” and the “long-term damage” to the economy. 

On Tuesday, Keir Starmer pledged reforms to the NHS and education. He also replaced Tony Blair’s 50% university target with a new ambition for two-thirds of young people to pursue either higher education or high-quality apprenticeships and underlined Labour’s focus on economic growth, presenting it as essential both to raising living standards and to uniting the country. 

UK open to overseas talent 

Earlier this month, Trump announced that skilled workers applying for the H-1B visa programme will now have to pay a $100,000 fee. Until now, applicants have only paid about $1,500 in admin costs, so this is a drastic increase. Many visa holders rushed to return to the US before the 21 September deadline, but the White House later clarified that the fee is not applicable to those who already have the H-1B visa. 

According to the BBC, the UK plans to double the number of visas available to skilled foreign workers to about 18,000 a year. Chancellor Rachel Reeves commented last week, “While President Trump announced late last week that it will make it harder to bring talent to the US, we want to make it easier to bring talent to the UK.” 

Content creators’ contribution to the UK economy 

A new report from Oxford Economics highlights that content creation is becoming a key part of the UK economy and job landscape. The research found that YouTube contributed £2.2bn to the UK economy in 2024 and supported over 45,000 full-time equivalent jobs. Despite this, YouTube’s inaugural Creator Consultation found that 56% of creators don’t feel like they have a voice in shaping government policies that impact their work and has called for creators to be recognised as a profession. As a result, an all-party parliamentary group (APPG) has been launched to represent UK creators and influencers, co-chaired by two former digital ministers, Feryal Clark MP and Lord Ed Vaizey. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (1 October 2025) 

Gen X stash the cash

Gen X savers are cautious, with over £34k on average held in cash savings Less than a third also invest, risking long-term value erosion from inflation Balancing cash investments can offer better growth without excessive risk 

Nearly two in three Brits born between 1965 and 1980 hold ‘significant’ savings in cash, new research1 shows, while their attitudes to investing remain more cautious. Despite the greater returns available with stocks and shares, almost half of Generation X view investing as ‘too risky.’ 

Cash to the left of me… 

Gen X are saving hard, the figures reveal, with an average of £34,114 stashed away in cash savings accounts. Having accumulated savings throughout their career, many of those in their late 40s and 50s are building solid foundations for their retirement. 

However, only holding savings in cash means missing out on the potential upsides of investing. Fewer than one in three Gen X cash savers also invest in stocks, shares or mutual funds, which means their hard-earned cash continues to fall ever further behind the pace of inflation. 

Longer-term plan 

Having a cash buffer for emergencies is very sensible; however, an over-reliance on cash leads to the value of your wealth being eroded. Longer-term returns have historically been more advantageous for investors (though future returns are not guaranteed), so keeping all your money in cash means foregoing these potential rewards. 

On the other hand, achieving a better balance of cash and stocks can maximise your returns without taking undue risk. We can help you find the right mix of cash savings and investments, at a risk exposure that feels right for you. 

1Just Group, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

Demand for second homes falls: what does it mean for local buyers and sellers? 

Council Tax hikes on second homes are triggering a surge in holiday property sales In popular holiday destinations the number of properties being listed for sale has increased over 40% This shift in property ownership has the potential to impact entire communities  

From country cottages to seaside retreats, the second home market is facing challenges. From Tenby to Truro, owners of holiday homes and short-term rental properties are selling up in response to rising costs and policy changes. 

A shift in Council Tax rules has been a major trigger, with some local authorities charging up to an extra 100% on furnished homes not used as a sole or main residence from April 2025. 

Greater choice, lower price 

In popular holiday destinations, such as Bournemouth and Torquay, the number of properties being listed for sale has increased by more than 40%, according to research1. 

More properties on the market means more choice for buyers. Holiday homes and lets, however, are not always a good match with full-time living. For example, there might be restricted parking, limited outdoor space or a lack of nearby local services, such as schools. 

A surge in properties for sale can also impact market dynamics. This can be good news for buyers, but bad news for sellers. 

Sell and buy with confidence 

This shift in property ownership has the potential to impact entire communities not just buyers and sellers. Local economies can suffer if there’s a drop in tourists, while community services, such as GP surgeries, can come under greater pressure if there’s a rise in permanent residents. 

Whether you are buying or selling, there’s a lot to consider – especially when it comes to securing or redeeming a mortgage. We can help you navigate the different financing options and minimise potential risks. 

1Zoopla, 2025 

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. 

A closer look at the ‘nearshoring’ trend

Nearshoring is rising as firms prioritise bringing supply chains closer to home Trump Tariffs’ have only underlined the need for companies to explore their options  As the global economy evolves, identifying long-term trends is important 

The pandemic, raised geopolitical tensions and supply chain shocks, have all forced companies to rethink how they operate. Many, although not all, are moving away from globalisation strategies and focusing on greater resilience instead, with ‘nearshoring’ – bringing supply chains closer to home – becoming the priority. 

A transition from ‘just-in-time’ to ‘just-in-case’ logistics 

Nearshoring reflects a move away from ‘just-in-time’ efficiency towards ‘just-in-case’ preparedness. The need for supply chain stability and faster turnaround times is encouraging businesses to bring their operations closer to the markets they serve. ‘Trump Tariffs’ have only underlined the need for companies to explore their options. This is opening up new opportunities in both developed and emerging markets. 

For example, countries like Mexico, Poland and Vietnam are positioning themselves as regional production hubs. Demand is also increasing across sectors such as automation, logistics, real estate, infrastructure and advanced manufacturing, as companies modernise supply chains closer to home. 

A temporary trend or lasting change?  

While some view nearshoring as a short-term response to recent disruptions, others see globalisation weakening. Perhaps, but labour costs in nearshoring destinations are often higher than in traditional offshore markets, while infrastructure and policy support can vary widely. Also, restructuring supply chains is complex, expensive and time consuming. Political risk and protectionist policies all add to the challenges. 

What do the professionals think?  

According to investment manager PGIM, despite rising tariffs and shifting trade, around 75% of the world’s economy remains focused on global integration rather than nearshoring. Shehriyar Antia, Head of Thematic Research at PGIM, explains, “Even if America’s ‘small yard’ of protected industries grows larger, companies in most industries will still seek out the benefits of free trade and competitive advantage.” 

An evolving investment theme  

While nearshoring will create new investment opportunities, choosing the right ones takes careful research. As the global economy evolves, those who identify and understand long-term trends are likely to be rewarded. You can rely on us to do just that. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

News in review

The Bank of England held rates at 4%, signalling cautious future cuts as inflation remains at 3.8% US-UK ‘Tech Prosperity Deal’ secures £150bn in pledged investment, focused on AI, quantum computing and clean energy UK consumer confidence declined in September, with households increasingly pessimistic about the economic outlook and personal finances 

“’We’re not out of the woods yet” 

The Monetary Policy Committee (MPC) voted to retain Bank Rate at 4% during its September meeting last week, following a 0.25 percentage point cut in August. This outcome was in line with expectations, as last week’s data from the Office of National Statistics (ONS) found that inflation remained at 3.8% in August.  

The MPC outline that they remain ‘focused on squeezing out any existing or emerging persistent inflationary pressures, to return inflation sustainably to its 2% target in the medium term.’ They expect twelve-month CPI to increase slightly in September, before falling towards the 2% target thereafter. 

The cost of food and non-alcoholic drinks increased for the fifth consecutive month in August, increasing by 5.1% year-on-year – the highest rate for 19 months. This spike is likely due to bad weather affecting harvests, plus increases in the minimum wage and National Insurance Contributions, prompting supermarkets to raise prices.  

Restaurants and hotels made a large upward contribution to inflation, with prices rising by 3.8%. The largest downward contribution came from transport due to a slowdown in air fares.  

With overall inflation at the highest level since January 2024, it’s not surprising that the MPC voted by a majority of seven-to-two to maintain Bank Rate. Andrew Bailey, Bank of England (BoE) Governor, commented on the decision, “Although we expect inflation to return to our 2% target, we’re not out of the woods yet so any future cuts will need to be made gradually and carefully.” 

The BoE also decided to slow the rate at which it sells off UK government bonds (known as gilts), which were bought during the financial crisis and the pandemic to support the economy. The BoE had been reducing the amount of debt it holds by about £100bn a year, but this rate will slow to £70bn over the coming year to minimise the impact on financial markets.  

Meanwhile, across the pond… 

Last Wednesday, the US Federal Reserve cut interest rates by 0.25 percentage points for the first time this year, after pressure from President Trump to lower the cost of borrowing. The following day, US stock markets reached record highs.  

Starmer and Trump sign historic ‘Tech Prosperity Deal’ 

Donald Trump made his second state visit to the UK last week, where he and Keir Starmer signed the first US-UK tech agreement. The ‘Tech Prosperity Deal’ promises to strengthen ties in AI, quantum computing and nuclear power, and is part of a wider plan to boost the relationship between the US and UK.  

US firms have reportedly pledged £150bn in UK investments, which is predicted to create tens of thousands of jobs. With £90bn coming from alternative asset manager Blackstone, it has not been decided how the money will be spent. Microsoft will invest £22bn over the next four years, which will go towards AI infrastructure and operations. Plus, Google has pledged £5bn over the next two years to fund the opening of its data centre in Hertfordshire.  

The UK government hopes that this pact will bring ‘new healthcare breakthroughs, clean homegrown energy, and more investment into local communities and businesses in Britain and the United States.’ 

A decline in consumer confidence  

Consumer confidence dropped across the board in September, according to GfK’s index. The overall index score slipped by two points month-on-month to -19. Expectations for the general economic situation went down to -32, five points worse than September 2024. The measure for personal finances over the last 12 months decreased by three points to -7, but is two points better than a year ago.  

Consumer Insights Director at GfK, Neil Bellamy, said, “There’s an autumnal chill in the air this month”, adding “the August 7th decrease in interest rates does not appear to have provided any obvious boost to the financial mood of consumers or drawn attention away from day-to-day cost issues.” 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (24 September 2025) 

Residential Property Review – September 2025

Any Autumn Budget changes to Stamp Duty and CGT could heavily influence housing activity in late 2025 Mortgage rates dipped below 5% but gilt yields raise concern of further increases 15% of property sales fell through in 2025, with converted homes most affected 

Housing market outlook 

According to Savills, housing market performance for the rest of the year is dependent on the Autumn Budget, with many speculating that the Chancellor will announce changes to Stamp Duty and Capital Gains Tax.  

This uncertainty may slow down market activity up to 26 November, as buyers and sellers wait to see what Rachel Reeves has in store. Sensible pricing will therefore be essential for those looking to secure a sale over the coming months.  

Moneyfacts reported in mid-August that the average five-year fixed rate mortgage fell below 5% for the first time since May 2023. However, the yield on 30-year UK government bonds hit a 27-year high in September, bringing concerns that mortgage rates will go up again.  

Meanwhile, rental growth was 2.4% in August according to Zoopla, the lowest annual rate in four years and less than half that recorded in August 2024. 

15% of property sales fall through 

It’s not been the easiest year for sellers, with one in seven property sales falling through between January and July 2025.  

According to property data analysts Outra, it took an average of 35 days for a sale to fall through after going under offer. The South East was the UK region with the highest number of fall-throughs (17.07%), followed by the South West (16.83%). Scotland had the fewest (8.14%), but this is reflective of lower market activity in the area.   

The property type with the highest fall-through rate was converted homes (17.35%), followed by end-of-terrace houses (16.03%).   

Simon Dawson at Outra commented, “There’s a limit to what you can do to prevent your sale falling through – when you’re dealing with a buyer, some things are out of your control. By understanding market trends and buyer behaviour, you can make better-informed decisions, reduce risk and increase certainty in the selling process.” 

Buyer hotspots in London 

Rightmove has identified the most in-demand areas amongst homebuyers in London.    

A map highlighting the most desirable areas in the capital has caused a stir online – shaped like a banana, the curve runs from South West to North East London. However, Rightmove’s research has shown that eight out of the ten buyer hotspots are not actually inside this area. Docklands and Hackney are the most in demand, both outside of the banana zone. Islington and Battersea were the only neighbourhoods that fell within the curve.  

Property expert at Rightmove, Colleen Babcock commented, “Affordability is a key driver, with many of the most in-demand locations offering better value than the London average. It’s a reminder that buyer interest doesn’t always follow the trend, it follows the opportunity.” 

All details are correct at the time of writing (17 September 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission 

Commercial Property Market Review – September 2025

City investment volumes reached £2bn by July, 33% below average, but deal sizes are notably larger The outlook for H2 2025 is brighter due to improved credit and stabilising investor confidence in offices and industrials London construction faces pipeline contractions, though government-backed infrastructure projects show some momentum 

City investment market update 

The latest statistics from Savills offer an insight into the City investment market. 

In July, the market recorded £197.6m of transactions across six deals. One of these marked the seventh deal over £100m in 2025, already beating 2024’s total of four large transactions across the whole year, suggesting renewed investor appetite for larger lot sizes. 

Between January and July, total turnover in the City investment market reached £2bn across 42 transactions, which is 33% lower than the five-year average. However, the average deal size is currently £47.6m, significantly higher than the average of £23.6m recorded this time last year. 

At the end of July, there was £2.05bn of commercial property under offer across 41 transactions. There is £1.9bn of stock currently available, with more expected to come on the market in September following the usual summer holiday slowdown. Meanwhile, the Savills City prime yield remains at 5.25% for the twenty-fourth consecutive month.  

A stronger H2 for commercial property?  

The UK commercial property market had a subdued start to the year, but the outlook for H2 is stronger.  

According to CBRE, investment volumes in the first half of 2025 were down 18% when compared with H1 2024. Figures from Savills supported this, with overall volumes 7% lower than the long-term H1 average. The slowdown is likely due to widespread economic and geopolitical uncertainty, including inflation, trade tariffs and global conflict. As a result of these ongoing concerns, investors are generally concentrating on the office and industrial sectors, with limited activity outside of these areas. Office yields are at attractive levels considering interest rate levels, which are helping to attract investors.  

Market experts anticipate that the second half of the year will be a little brighter for commercial property. Expectations of further cuts to Bank Rate should boost investor confidence, along with improved credit conditions and some anticipated economic clarity.    

London construction market faces challenges 

A report from Arcadis has found that the London new build pipeline contracted by nearly 30% in Q2, despite some big infrastructure orders at the start of the year.  

According to the latest London Office Crane Survey, construction activity in the capital hit the lowest level since summer 2022, with 2.4 million sq. ft. added to the pipeline in the six months to the end of March.  

There are some signs that the construction pipeline is regaining momentum, albeit slowly. Public non-housing output increased by 16% year-on-year in Q2, driven by government-backed health, research and infrastructure projects. As this sector only accounts for 10% of new build work it is not enough to drive recovery on its own.   

Simon Rawlinson at Arcadis said, “Economic headwinds and the complexity of delivering major programmes continue to hold back recovery. But for those willing to invest now, opportunities remain.” 

Quality over quantity for Scottish investors 

Investors in the Scottish commercial market appear to be more selective, opting for fewer deals that are higher in value.  

According to Knight Frank, there were 59 commercial property transactions in Scotland in the first half of 2025. The average deal size was £12.7m, which is 24% more than the average for 2020-2024 and the highest level in several years. Investment interest is focused on Scotland’s main cities, particularly Edinburgh, where the average deal size has increased by 84% to reach £26.3m. Glasgow saw a rise of 38% to £15.5m, while the typical deal in Aberdeen increased by 4% to £7.3m. However, outside these three cities, the average deal size fell by 52% to £3.2m.  

Head of Scotland Commercial at Knight Frank, Alasdair Steele, commented on the findings, “There is a clear shift in preference among investors towards quality assets in the best locations – generally speaking, city centres.” 

All details are correct at the time of writing (17 September 2025) 

It is important to take professional advice before making any decision relating to your personal finances. Information within this document is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK. We cannot assume legal liability for any errors or omissions it might contain. Levels and bases of, and reliefs from taxation are those currently applying or proposed and are subject to change; their value depends on the individual circumstances of the investor. No part of this document may be reproduced in any manner without prior permission 

News in Review

GDP grew by 0.2% in the three months to July, a slowdown from 0.3% recorded in Q2 US inflation was higher than expected in August with CPI rising 0.4%, the sharpest increase since January ONS revealed the latest wages data showing that total pay, including bonuses, for the three months to July was 4.7% 

“’In the latest month, GDP showed no growth, with increases in services and construction offset by falls in production” 

The latest figures from the Office for National Statistics (ONS) show that the UK economy flatlined in July, with no growth recorded. This is in line with expectations and follows gross domestic product (GDP) growth of 0.4% in June.  

ONS highlighted that monthly growth rates can be volatile, so it recommends referring to the three-month growth rate as an indicator of the state of the economy. On this basis, GDP grew by 0.2% in the three months to July, a slowdown from 0.3% recorded in Q2. It also marks a noticeable decline on Q1 data, which saw robust growth of 0.7%, reinforcing concerns that the UK economy is losing steam after a stronger start to the year. Economists suggested that higher government spending, along with the impact of the US tariffs, may have contributed to the recent loss of momentum.  

Director of Economic Statistics at ONS, Liz McKeown, commented on the findings, “In the latest month, GDP showed no growth, with increases in services and construction offset by falls in production.” The service sector was the main driver of GDP growth in the three months to July, with the health sector, computer programming and office support services all showing strong performance. Meanwhile, production output contracted by 1.3%, the sharpest monthly decline since July 2024.  

CBI Lead Economist, Ben Jones, said, “The sunshine may have lifted consumers in July, but the broader economy stayed stuck in the shade. Growth was uneven across sectors, highlighting that underlying demand remains more fragile. Speculation about new business taxes is casting a long shadow. Amid rising cost pressures, firms are already holding back on hiring and investment and are wary of weeks more Budget uncertainty.” 

Uptick in US inflation  

US inflation was higher than expected in August, with the Consumer Price Index (CPI) rising by 0.4%, according to the US Bureau of Labor Statistics. This represents the sharpest increase since January, mainly driven by higher costs for housing, food and petrol, all of which continue to weigh heavily on consumers’ budgets. So-called core CPI (which excludes food and energy) rose by 0.3%, unchanged from the previous month. Analysts noted that the spike in overall inflation reflects the impact of the tariffs, with businesses passing higher costs onto consumers. This has filtered through to the price of core goods, which increased by 0.3%, while food costs went up 1.6%.  

At the same time, there are signs that the labour market is weakening. At the start of September, the number of initial claims for state unemployment benefits increased to 263,000, the highest level since October 2021. This figure tends to indicate the number of people who are newly out of work, so is another concerning sign for the US economy.  

Later life lending increases 

According to UK Finance, 33,130 new loans were advanced to borrowers aged 55 and above in Q2. This amounted to £5.2bn in lending, up 3% annually. The number of new lifetime mortgages also increased by 3.7% to 5,830, valued at £520m, which is 10.6% more than last year.  

Two-year fixed mortgages are most popular 

Data from Moneyfacts has found that nearly half (48.5%) of prospective borrowers are seeking two-year fixed rate mortgages. Many of these people are looking to remortgage (25.34%), while 19.16% are first-time buyers. Five-year fixed deals were the second most popular mortgage option, with 27.05% of people preferring these terms. On the other hand, one- and four-year deals were the least sought after, attracting only 1.94% of borrowers.  

State Pension likely to rise by 4.7% in April 

On Tuesday, ONS revealed the latest wages data showing that total pay, including bonuses, for the three months to July was 4.7%. Under the ‘triple lock’ policy, the State Pension goes up each year by either 2.5%, inflation, or average earnings growth – whichever is the highest figure. It is expected that the new flat-rate State Pension, for those who reached state pension age after April 2016, will increase to £241.05 a week, taking it to £12,534.60 a year, a rise of £561.60. 

Here to help 

Financial advice is key, so please do not hesitate to get in contact with any questions or concerns you may have. 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. 

All details are correct at time of writing (17 September 2025) 

Who will inherit your pension?

1 in 6 people don’t know who their pension would go to if they passed away Cohabiting partners are especially at risk of missing out if not formally nominated Some still have ex-partners listed – regular reviews are essential 

One in six people with a partner admitted in a recent study1 that they ‘do not know’ who would inherit their pension savings if they were to pass away before taking them. 

The majority (65%) of respondents have nominated their partner or spouse as their named beneficiary, while one in five say they have selected another family member. A small number say they are leaving their pension pot to a charity (4%) or a friend (3%). 

A worrying trend 

However, a concerning proportion of respondents did not know who would be their beneficiary. In particular, people living with a partner but neither married nor in a civil partnership were especially likely to be unaware – some 25% of these respondents could not name theirs. 

Likewise, younger respondents were least likely to know, with one in ten aged between 16 and 24 saying they did not know. At the other end of the spectrum, those aged 79 or older were also over-represented in not knowing, at one in five (18%). 

Choose carefully 

Even more worrying was the finding that a further 3% of respondents believed that the person nominated as their beneficiary might still be their ex-partner. Indeed, a separate study2 found that one in 10 divorcees have forgotten to remove their ex-partner as a life insurance beneficiary. 

Don’t risk your pension falling into the wrong hands – review your beneficiary regularly to ensure it reflects your current wishes and circumstances. 

1Aviva, 2025, 2Legal & General, 2025 

The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated.