Central Banks diverge, construction boost and CRE investment to reach pre-pandemic level by year-end
Discover key economic and financial metrics, and what to look out for in the week ahead.
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Here we look at the leading indicators in the world of economics. Download the dashboard for in-depth analysis into commodities, trade, equities and more.
To raise or not to raise: that is (still) the question
Both the US Federal Reserve (the Fed) and Bank of England (BoE) have previously hinted at raising interest rates to counteract higher inflation, however there has since been a divergence in approach. Due to an increase in volatility caused by the Omicron variant, the BoE is now widely expected to take a wait-and-see approach at the last monetary policy decision of the year next week, holding interest rates at 0.1%. In contrast, last week, the Fed’s Chairman, Jay Powell, committed to accelerating the tapering of its asset purchasing programme.
Both UK GDP and commercial real estate investment to reach pre-pandemic levels by year end
December’s OECD forecast predicts the UK to have the strongest growth of all G7 countries in both 2021 and 2022, with +6.9% and +4.7% growth in each year, respectively. The UK economy’s resilience has also been reflected in the commercial real estate sector, where £49bn has been transacted so far this year. As Q4 is typically the strongest quarter for transactions, we expect investment to ultimately exceed 2019’s £54bn.
Commercial property boosts UK construction in November
The UK Construction PMI saw robust expansion in November, increasing to 55.5 from 54.6 in October. This was largely driven by commercial construction work which grew at its quickest pace since July, with the strongest rise in office construction. Another promising sign was the availability of subcontractors reaching its highest level since May, with labour shortages easing. Official UK construction statistics will be out at the end of the week.
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