MARKET INTELLIGENCE
Economic and property market review
November 2023
DATA & ANALYSIS
MARKET CONDITIONS
Economic trends
- Global financial markets have been volatile this year, although recent weeks have seen an improvement in sentiment based on a growing expectation that interest rates have peaked in most advanced economies.
- The Q3 2023 UK GDP figures showed output flatlined on a q-on-q basis, which was down on the 0.2% recorded in Q2 and below the 10-year average of 0.4%.
- The monthly GDP figures have been volatile, with output shrinking by -0.6% in July, then returning to growth at 0.1% in August, rising to 0.2% in September.
- CPI inflation stood at 4.6% in the year to October 2023, which was down markedly on the September figure of 6.7%.
- At the November meeting of the Bank of England’s Monetary Policy Committee (MPC) the decision was taken to leave the UK base rate unchanged at 5.25%.
- The unemployment rate was unchanged at 4.2%. This is low by historic standards and indicates a tight labour market.
- The UK composite Purchasing Managers’ Index (PMI) increased in October to 48.7 from 48.5 in September.
Property market
- Oxford Economics is currently predicting 0.6% full year UK GDP growth in 2023, then 0.4% in 2024 and 1.4% in 2025.
- The last year has seen the UK property investment market experience a downturn sparked by high interest rates and a subdued economy. Occupier markets have held up comparatively well, although they too have experienced a slowdown this year.
Offices
- Office rental value growth picked up in October, with the MSCI Market Rental Growth Index for offices reading at 0.18% on a month-on-month comparison, up from 0.03% in September.
- The MSCI capital value growth index for Offices decreased by -1.96% month-on-month in October, compared to -1.69% in September.
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