News in Review

“Our economy is rebounding faster than initially expected”

Last week saw the International Monetary Fund (IMF) release its latest assessment of the global economy. Among the headline stories was a sharp increase to this year’s UK growth forecast, with the renowned international soothsayer now predicting a 7% expansion – 1.7 percentage points higher than its previous projection published in April. This uplift was attributed to stronger than expected growth between February and April, due to the success of the UK vaccination programme and furlough scheme. Responding to the upgrade, Chancellor Rishi Sunak said, “There are positive signs that our economy is rebounding faster than initially expected.”

Along with the US, the UK rate was the joint-highest among the major advanced economies. In total, growth across all rich nations is forecast to be half a percentage point above April’s prediction. However, the latest IMF assessment did highlight a worrying divergence in fortunes between rich and poor countries due to differing levels of access to COVID vaccines. As a result, the overall global growth forecast for 2021 remains unchanged at 6%, with a weaker outlook for many emerging market and developing economies offsetting gains across richer nations.

US growth below expectations

While the US economy is expected to witness strong growth this year, the latest gross domestic product (GDP) figures released last Thursday fell short of market expectations. According to the Commerce Department’s advance estimate, the US economy grew at an annualised rate of 6.5% in the second quarter. This was only slightly above the rate recorded in the first three months of the year and significantly below the consensus forecast of 8.5%. It did, however, move US output back above its pre-pandemic level for the first time since COVID struck.

Eurozone growth rebounds

GDP data published on Friday also showed the eurozone economy has pulled out of its pandemic-induced recession, with an initial second quarter growth estimate of 2%. This figure, which was better than economists predicted, was buoyed by a particularly strong performance from the bloc’s third and fourth largest economies, Italy and Spain, which posted quarterly growth rates of 2.7% and 2.8%, respectively. Despite the second quarter rise, the eurozone economy remains 3% smaller than its pre-pandemic peak. The first estimate of UK second quarter GDP is due for release on 12 August.

Eurozone and US inflation up

During the past seven days, both the eurozone and US statistics agencies published new inflation data. In the eurozone, an early official estimate suggests annual inflation rose to 2.2% in July from 1.9% in June. This was 0.2 percentage points above market expectations and the highest rate since October 2018; it also moved inflation above the European Central Bank’s 2% target.

In the US, the Federal Reserve’s preferred inflation measure (core PCE) rose to 3.5% in the 12 months to June, from 3.4% in May. While this leaves the rate well above the central bank’s 2% target, it was actually 0.2 percentage points below analysts’ expectations. A day prior to the inflation data release, the Fed announced its current monetary policy stance would remain unchanged, with Fed Chair, Jerome Powell, reiterating his view that higher prices were the result of “transitory factors” and therefore not an imminent risk to the US economy.

Furlough numbers fall

Official figures published last Thursday showed the number of people on furlough at the end of June stood at 1.9 million, more than half a million fewer than at the end of May. The news came three days before the next phase of furlough tapering was introduced, with employers having to contribute 20% towards employee salaries from 1 August. Research published by the British Chambers of Commerce on Monday suggests nearly one in five firms are considering staff redundancies in response to the furlough change.

Housing market cools

The latest Nationwide House Price Index, released last Wednesday, revealed that annual house price growth slowed to 10.5% in the year to July, down from a 17-year high of 13.4% in the previous month.

Stocks rally

After having been hit by concerns over China’s tech crackdown last week, London stocks rallied at the start of the week; the FTSE 100 rose to a three-week high on Tuesday afternoon, continuing its strong start to August, whilst the domestically focused FTSE 250 reached another record high.

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.

In the news – Money

Be wary of that holiday selfie

Now that many of us are able to make travel plans, remember to think twice before posting a holiday selfie on social media. Your insurer may consider this as telling people that you are away from home, leaving your property unoccupied and as a result, potentially invalidating or compromising your insurance cover. Unfortunately, more and more criminals are using social media posts to identify when a property might be empty.

Sustainable funds – a new record

Data from industry tracker Morningstar shows that 2021 started with continued European interest in sustainable funds, attracting all-time high inflows of €120bn in Q1, 18% higher than the previous quarter. Climate funds proved to be top of the preferred list, with six of them featuring in the top 10. The number of sustainable funds available continues to grow; 111 new sustainable funds launched in Q1.

Jabbed population are financially optimistic

Those who have already received their COVID-19 vaccination are reported to be more optimistic about their finances than those who are yet to have their jab1. As well as giving people a feeling that the worst of the pandemic may be over, the jab also seems to be providing people with financial optimism about both investing and their own financial position. Nearly half (48%) of those who have had the vaccine believe now is a good time to invest, compared to 39% who have not yet received the jab.

1Aegon, 2021

Lenders reassured by mortgage guarantee scheme

The government’s mortgage guarantee scheme, which launched in April 2021, is encouraging lenders to offer mortgage finance to buyers with smaller deposits. It has been welcome news for prospective home buyers.

The scheme works as follows. The government offers lenders a ‘guarantee’ on 95% LTV mortgages (i.e. those worth 95% of the property value, with a 5% deposit required from the buyer). The guarantee applies to the portion of the loan over 80%, with the government compensating the lender for a portion of the net losses suffered in the event of repossession.

To be eligible, you must:

•             Be a first-time buyer or home mover

•             Be buying a property to live in yourself

•             Pass all normal affordability checks

•             Be offered a mortgage between 91% and 95% LTV.

Get your foot on the ladder

Reassured by the guarantee, many high street lenders have now launched 95% mortgage deals. So, whether you’ve had to put your property dreams on hold during the pandemic or are just starting out on your homeownership journey, get in touch and we can assist you in getting the most suitable mortgage for your needs.

The scheme is due to end on 31 December 2022, subject to review.

As a mortgage is secured against your home or property, it could be repossessed if you do not keep up mortgage repayments. You may have to pay an early repayment charge to your existing lender if you remortgage.

Warm outside? Don’t forget about the LTA freeze

Summer, freedom and (hopefully) sunshine are all well on the way, but not planning for the Lifetime Allowance (LTA) freeze could cast a cloud over your finances.

For the next five years (until April 2026), the pension LTA will be held at its current level of £1,073,100. This means that the amount you can hold in your pension without incurring tax for withdrawals will remain static, even in the face of inflation. As a result, pension savers will likely need to consider other saving options over the next few years in order to avoid a tax bill. Tax is currently payable at 55% on everything over the limit if you take the money as a lump sum, or 25% if you take the money in another way, such as drawdown or through an annuity. As people continue to build up their pensions, the number approaching the LTA will increase as a result of the ‘big freeze’; so, you might wish to consider the various other options available to supplement your retirement savings.

The solution that suits you will be wholly dependent on your personal situation and circumstances. Consideration and planning are therefore important before you select the option that is right for you, particularly in light of the complexity of calculations around pensions and the LTA.

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

In the news – Home Finance

How does your garden grow?

Since the pandemic hit the UK, Brits have been spending more time in their garden – and spending more on them, too. According to new research1, 58% of respondents to a survey said their garden is now a bigger priority, which has been reflected in their spending. Almost a quarter of respondents (22%) spent more than £600 on their garden last year, compared with 12% in 2019. What’s more, over a quarter (27%) say they intend to spend over £600 in 2021.

The best return on your BTL investment

Buy-to-let (BTL) property can turn a real profit and provide a good income for landlords. Typically, UK BTL investors see a 5% annual return on average from their property – but profit is very much dependent on location. According to research, the top 10 places to invest in a rental property are: Sunderland, Blackburn, Durham, Blackpool, Oldham, Cleveland, Liverpool, Wigan, Bolton and Manchester.

Home moves prompted by nightmare neighbours

While the pandemic has prompted many people to move in search of more space, larger gardens or a more rural lifestyle, other people have less positive reasons for moving. According to a survey2, 28% of those asked why they moved home cited a desire to move away from noisy or messy neighbours. It’s likely that neighbour frustrations annoyed us more than usual last year, due to the amount of time we spent at home.

1Quickmovenow, 2021

2Yes,Homebuyers, 2021

Multi-jobbers take heed

Workers with more than one job, earning lower salaries, are at risk of a poorer retirement, as they miss out on employer pension contributions, a new study has found1.

Under the auto enrolment scheme, employers are required to set up a pension and make contributions on their employees’ behalf, unless an employee decides to opt out. Employees need to earn at least £10,000 a year to be automatically enrolled. This is where the issue faced by multi-jobbers becomes clear, as no matter how much someone earns in total, they are excluded from auto enrolment where the individual job pays less than £10,000 p.a. This has been estimated to affect more than four million people in the UK.

Threshold confusion

Many workers are unaware that providing they have qualifying earnings above £6,240, they can choose to opt into their company’s pension scheme, with the employer legally required to contribute at a rate of 3% of their salary. Those earning under £6,240 can still opt into their company pension, but their employer is not required to contribute.

Worryingly, the study found that around one in 20 multi-jobbers, with at least one job paying under the £10,000 threshold, say they have been refused entry into a company pension by their bosses.

1Scottish Widows, 2021

The value of investments and income from them may go down. You may not get back the original amount invested. A pension is a long-term investment. The fund value may fluctuate and can go down. Your eventual income may depend on the size of the fund at retirement, future interest rates and tax legislation.

Residential Property Review – July 2021

Building Safety Bill published

Claiming “the biggest changes to building safety in nearly 40 years“, Housing Secretary, Robert Jenrick, said that the Building Safety Bill will set out a clear pathway for the future as to how residential buildings should be constructed and maintained.

The Bill was published on 5 July to set out new and more stringent requirements for residential buildings, following Dame Judith Hackitt’s review of building regulations and fire safety after the Grenfell Tower tragedy in 2017.

New measures include:

  • Identifying people responsible for safety during the design, build and occupation of a high-rise residential building
  • Establishing a Building Safety Regulator to hold to account those who break the rules and are not properly managing building safety risks, including taking enforcement action where needed
  • Giving residents more routes to raise concerns about safety, and mechanisms to ensure their concerns will be heard and taken seriously
  • Extending rights to compensation for substandard workmanship and unacceptable defect
  • Driving a culture change across the industry to enable the design and construction of high-quality, safe homes in the years to come.

Scarcity of new listings

In its latest UK Residential Market Survey, the Royal Institution of Chartered Surveyors (RICS) has indicated that new listings are becoming increasingly scarce.

The RICS Survey points to a continuing excess of demand over supply, with a net balance for new instructions of -34% (down from -24% in May) during June, which is a third consecutive monthly fall in new listings.

Knight Frank has also reported strong demand, with figures showing a ratio of new prospective buyers to new instructions to sell, being 10.4 in June, which is 56% above the five-year average.

James Cleland, Head of Knight Frank’s Country business commented, “Stock is still low but building. There will be a gradual restocking over July and August and good houses will sell well over the summer. It actually feels like we’re moving towards a better place as a rebalancing of the market is underway.“

Property prices in Scotland continue to rise

The property boom is continuing in Scotland – an annual growth figure of 12.1%, in the year to May 2021, has been recorded.

This is the highest increase in house prices in over a decade in Scotland and has occurred without the benefit of the Stamp Duty holiday, which has continued to offer buyers a significant discount elsewhere in the UK, fuelling the growth in house prices.

According to Savills, the average house price in Edinburgh rose to over £300,000 in May, for the first time. John Forsyth, a Director of Savills commented, “The sales market, particularly for family homes, has been very active in the first half of the year. Nearly 80% of the properties we have sold have attracted multiple bidders and premiums of up to 15% to 20% over valuations have been achieved by our Edinburgh city office. Our registered buyer inquiry levels were up 30% in June when compared with June 2019, which has resulted in more competition, particularly for family homes throughout the city.“

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House Prices Headline statistics

House Price Index (May 2021)* 133.5*

Average House Price £254,624

Monthly Change 0.9%

Annual Change 10.0%

*(Jan 2015 = 100)

  • Average house prices in the UK increased by 10% in the year to May 2021
  • On a non-seasonally adjusted basis, average house prices in the UK decreased by 0.9% between April and May 2021
  • House price growth was strongest in the North West where prices increased by 15.2% in the year to May 2021.

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House Prices Price change by region

Region   Monthly Change (%) Annual Change (%) Average Price (£)
England   0.4 9.7 £271,434
Northern Ireland
(Quarter 1 – 2021)		 1.1 6.0 £149,178
Scotland 5.4 12.1 £171,448
Wales   0.8 13.3 £184,297
East Midlands -0.2 11.0 £216,077
East of England -1.0 6.9 £310,200
London -0.7 5.2 £497,948
North East 1.4 11.8 £143,129
North West 1.4 15.2 £189,245
South East 1.4 9.1 £350,016
South West -0.6 8.4 £277,603
West Midlands Region 0.8 9.8 £219,793
Yorkshire & The Humber 0.8 10.2 £181,856

Source: The Land Registry
Release date: 14/07/21 Next date release: 18/08/21

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Average monthly price by property type – May 2021

Property Type Annual Increase
Detached
£391,656		 11.3%
Semi-detached
£242,634		 9.8%
Terraced
£208,810		 11.4%
Flat / maisonette
£215,731		 6.5%

Source: The Land Registry
Release date: 14/07/21

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Residential market outlook

“The total stock of homes for sale continues to run well below historical norms, and this will underpin pricing. At the same time, it may also constrain potential activity, especially for buyers looking for family houses. Even so, we forecast that this year will be one of the busiest for the housing market since the global financial crisis.“

Grainne Gilmore, Head of Research at Zoopla
Source Zoopla June 2021

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Contains HM Land Registry data © Crown copyright and database right 2017. This data is licensed under the Open Government Licence v3.0.

All details are correct at the time of writing (20 July 2021)

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 – July 2021

Moratorium on commercial evictions extended

The government has announced an extension to the moratorium on commercial eviction due to rent arrears until 25 March 2022.

The scheme has been extended to give hospitality businesses and nightclubs, which have operated under restrictions for the entirety of the pandemic, and which came under increasing pressure when the planned 21 June date for lockdown easing was delayed, the breathing space they need to recover from the pandemic and to protect jobs. Housing Secretary Robert Jenrick has also announced that new legislation will be introduced to ringfence unpaid rent accumulated during periods of business closure, with landlords expected to make allowances for ringfenced arrears and to share the financial impact with their tenants.

The purpose of the legislation is to encourage landlords and tenants to work together to come to a mutual agreement about how the rent arrears will be repaid. If an agreement cannot be reached, the new legislation will ensure that the parties arrive at a legally binding agreement via an arbitration process.

In order to protect landlords, however, the government has stipulated that tenants who are able to pay their rent, must do so, and those who are currently unable must start paying as soon as restrictions change or they are given the green light to open.

The ban on statutory demands and winding-up petitions has also been extended for a further three months and will now end on 30 September 2021.

Logistics sector goes from strength to strength

Online retail is a prime contributor to the continued health of the logistics sector, as more warehouse space is needed to house operations and goods for dispatch. Estimates suggest that 37% of all retail sales will be online by 2025, an increase from 20% prior to the pandemic.

The latest ‘Big Shed Briefing’ from Savills, outlines that over the next couple of years, the main issue will be warehouse supply, ‘The availability of construction materials will mean that the pace of delivery for new speculative supply will not be able to keep up with demand.’

From a take-up perspective, over 24m sq. ft of warehouse space has been transacted in H1 2021, setting a new record, a massive 82% in excess of the long-term H1 average of 13.4m sq. ft. Fuelled by online retailers taking more compact parcel delivery type units, demand for premises between 100,000 and 200,000 sq. ft has increased, accounting for 36% of the market, up from 27% last year. With supply plummeting at its quickest pace ever and now totalling 25.08m sq. ft, Savills conclude, ‘This fall in supply means that, at a nationwide level, vacancy now stands at 4.37%, the lowest level since Savills started recording the metric, and a fall of 221 bps in 12 months. Grade A supply now stands at 6.91m sq. ft, again the lowest level we have ever recorded.’

The availability of construction materials will mean that the pace of delivery for new speculative supply will not be able to keep up with demand

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Commercial property currently for sale in the UK

  • Regions with the highest number of commercial properties for sale currently are South West and North West England
  • Northern Ireland currently has the lowest number of commercial properties for sale (25 properties)
  • There are currently 1,306 commercial properties for sale in London, the average asking price is £1,463,660.

Source: Zoopla, data extracted 20 July 2021

Region No. properties AVG. asking price
London 1,306 £1,463,660
South East England 1,183 £2,130,307
East Midlands 773 £967,639
East of England 728 £648,576
North East England 777 £349,957
North West England 1,433 £425,955
South West England 1,586 £537,683
West Midlands 1,171 £481,475
Yorkshire and The Humber 1,149 £327,864
Isle of Man 50 £461,187
Scotland 1,109 £302,368
Wales 765 £406,194
Northern Ireland 25 £408,205

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Confidence in London offices

Despite the disruption caused by the pandemic, and some firms looking to reduce their space as firms adopt flexible working on a long-term basis, London’s office market has shown resilience. It has been reported that office property viewings are increasing, and property developers are reporting good demand for modern and environmentally friendly buildings.

Brookfield, Canadian real estate property manager and investment firm, has just completed on a 550,000 sq. ft office purchase in Fenchurch Street, totalling £635m, believed to be the largest City acquisition since the beginning of the pandemic.

With several properties in the capital and part-owner of the Canary Wharf Group, Brookfield were attracted to the purchase of 30 Fenchurch Street because of the transport links, including access to the Elizabeth Line, and strong occupancy levels. Other large lettings this year include PVH Corp agreeing a pre-let in White City and TikTok UK signing for a building in Farringdon.

Managing Partner and Head of European Real Estate at Brookfield, Brad Hyler, commented on the deal, “As a long-term investor in the City of London, we believe the City is an attractive investment market and we are excited to expand our portfolio… London remains the commercial centre of Europe and one of the world’s premier global gateway cities, and as such we see continued robust demand for premium, well-amenitized office space in prime locations with strong sustainability and wellness credentials.”

Head of London office brokerage team, at commercial real estate services and investment firm, CBRE, Rob Madden commented, “As lockdown eases, we are beginning to see a steady bounce back in office take-up, with occupiers typically willing to pay for the best available product in the market in order to win the war for talent.”

All details are correct at the time of writing (20 July 2021)

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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

“The current approach to self-isolation is closing down the economy”

During a week which saw the delayed Tokyo Olympics finally get underway, the news agenda on these shores was largely dominated by the so-called ‘pingdemic’. After it was revealed that almost 620,000 alerts were sent to Test and Trace app users in England and Wales during the second week of July, the Confederation of British Industry (CBI) warned that the sharp rise in self-isolations was threatening the economy. CBI Director-General Tony Danker said, “The current approach to self-isolation is closing down the economy rather than opening it up. Businesses have exhausted their contingency plans and are at risk of grinding to a halt in the next few weeks.”

On Thursday evening, the government responded by announcing plans to roll out daily contact testing for supermarket depots and food manufacturers, to prevent up to 10,000 workers having to isolate when ‘pinged’. More critical workers, including police, firefighters and workers in some other industries, have subsequently been added to the daily testing programme. However, on Sunday, CBI Director of Policy John Foster said the exemption list “won’t get us where we need to be” and added, “If we want the economy to stay open, we need a confident but balanced plan. We should bring forward the date from 16 August when those who have been double-jabbed no longer need to self-isolate if they test negative once contacted.” 

UK growth slows down

A closely watched economic survey released on Friday suggests that the ‘pingdemic’ has already begun to impact on business activity levels. The IHS Markit/CIPS flash composite Purchasing Managers’ Index (PMI) fell to 57.7 in July from 62.2 in June, the lowest reading since March and significantly below market expectations. Commenting on the survey’s findings, IHS Markit Chief Business Economist Chris Williamson said, “July saw the UK economy’s recent growth spurt stifled by the rising wave of virus infections, which subdued customer demand, disrupted supply chains and caused widespread staff shortages, and also cast a darkening shadow over the outlook.”

Policymakers feel inflation tide will ebb

July’s PMI data also highlighted intensifying inflationary pressures, with input costs hitting an all-time high and output charges rising at a near-record rate. However, despite the continuing surge in inflation, during the past seven days, two Bank of England policymakers have reaffirmed their view that the current spike in prices is unlikely to persist, and that the central bank should not rush to remove stimulus for the economy.

Last Thursday, Deputy Governor Ben Broadbent said, “While we know it’s going to go further over the next few months, I’m not convinced that the current inflation in retail goods prices should in and of itself mean higher inflation 18 to 24 months ahead.”  On Monday, Gertjan Vlieghe, one of four external members of the Bank’s interest rate setting Monetary Policy Committee, said he felt the recent rise in inflation is likely to prove temporary, adding “I think it will remain appropriate to keep the current monetary stimulus in place for several quarters at least, and probably longer.”

Retail sales growth in June

Last Friday saw publication of the latest official retail sales statistics, which were boosted by strong demand for food and drink as fans watched Euro 2020. According to Office for National Statistics (ONS) data, total sales volumes rose by 0.5% between May and June, with food sales the main driving force behind the growth. ONS said, ‘Feedback from some retailers suggested that sales were positively boosted in June by the start of the Euro 2020 football championship.’  In contrast, overall sales at non-food shops declined, largely due to weak demand for furniture and clothing.

Government debt costs rise

Public sector finance statistics were also published last week and showed that borrowing continues to ease from the mammoth levels witnessed last year. In June, the government borrowed £22.8bn; although this was a fifth lower than the equivalent month’s figure in 2020, it still represents the second-highest June number ever recorded. The data also revealed upward pressure on debt costs, as rising inflation increased the value of index-linked government bonds. As a result, a record £8.7bn was spent on interest payments last month, more than three times the amount paid in June 2020.

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.

News in Review

“With every day that goes by our economy is slowly and cautiously picking itself up off the floor”

Ahead of so-called ‘Freedom Day’ on Monday, Boris Johnson urged people to exercise caution as most restrictions on social contact were lifted in England. With the Prime Minister and Health Secretary currently isolating, and UK daily infections totalling around 50,000, there are warnings that cases will surge over the summer. It was announced this week that some fully vaccinated people in critical roles in England, including NHS and care staff, will be able to continue working even if told to self-isolate.

Last Thursday, in the West Midlands, the Prime Minister set out his post-pandemic vision to level up the UK, outlining  government plans to “rewrite the rulebook” on local devolution, adding “With every day that goes by our economy is slowly and cautiously picking itself up off the floor, businesses are opening their doors… it is the mission of this government to ensure that in so far as COVID has entrenched problems and deepened inequalities – we need now to work double hard to overturn those inequalities… so that everyone everywhere feels the benefits of that recovery and that we build back better across the whole of the UK.”

Global stock markets fell at the start of the week, as fears that soaring infection rates will derail the trajectory of the economic recovery intensified. After the Dow’s worst day of the year so far, global shares stabilised on Tuesday as economic growth concerns eased.

UK job vacancies continue their ascent

Data released from the Office for National Statistics (ONS) last week, shows the UK labour market continues to recover. Despite remaining below pre-pandemic levels, the number of payroll employees increased again in June, totalling 28.9 million, up 356,000 month-on-month. For the first time since the beginning of the pandemic, some UK regions saw payroll numbers rise above pre-pandemic levels, including Northern Ireland, North East England, East Midlands and the North West.

In the three-month period to June, UK job vacancies surpassed pre-pandemic levels, driven by vacancies in the hospitality and retail sectors, with 862,000 jobs available in the three months to the end of June, 77,500 higher than the first three months of 2020.

Director of Economic Statistics at ONS, Darren Morgan, commented, “The labour market is continuing to recover, with the number of employees on payroll up again strongly in June. However, it is still over 200,000 down on pre-pandemic levels, while a large number of workers remain on furlough.”

Small shops face mountain of debt

A new report from veteran retailer Bill Grimsey, highlights how independent high street business debt has quadrupled over the last year, with Britain facing a ‘tsunami’ of shop closures this autumn, unless the government steps in. The report reveals that the UK’s small shopkeepers are grappling with debt of £1.7bn, having survived the pandemic by borrowing and now face the task of paying it back. Grimsey commented, “Our high street independents have experienced a new-found appreciation during lockdown. But they’ve also been forced to take on government-backed loans, which they would not have normally been able to get because their balance sheets wouldn’t allow it. Now they are struggling to manage a mountain of debt and need help.” The report concludes that Britain will not be able to ‘build back better’ unless policymakers choose to look beyond infrastructure investment to ‘equally prioritise small business and strengthen the social fabric of high streets.’  

China’s economic rebound loses momentum

New official figures show that the Chinese economic rebound has started to slow, with economists raising concerns over the recovery of the world’s second largest economy. Failing to hit the economists’ forecasts of 8.1% growth, Chinese GDP increased by 7.9% in Q2 (compared to the same time last year). Despite better-than-expected growth for industrial production and retail sales, shipping firms have been impacted by backlogs in the supply chain which have hampered factory output. Record high commodity prices pushed factory inflation to the highest level in over ten years. The National Bureau of Statistics report outlined, ‘China’s economy sustained a steady recovery with the production and demand picking up’, before going on to caution, ‘The epidemic continues to mutate globally and external instabilities and uncertainties abound.’

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.