According to the latest property supply index, there was a surge in owners listing their properties in the days after Brexit was delayed again, with listings up 0.8% in April, month on month.
Analysis by online estate agent, Housesimple, revealed that almost half (49%) of major UK towns and cities saw a rise in new properties coming onto the market in April compared to March.
The overall picture in London showed new listings down by 1.4% in April compared to March, but four in 10 boroughs actually saw supply levels rise, with the biggest rise occurring in Kensington and Chelsea, with listings up by 17.3%.
The UK economy benefited from a sharp one-off boost to growth in the first quarter of the year as manufacturers stockpiled ahead of a Brexit that never came.
Data released by the Office for National Statistics (ONS) revealed that gross domestic product (GDP) rose by 0.5% during the first three months of 2019; this compares with a growth rate of 0.2% in the final quarter of last year. While this clearly represents a strong rebound in growth, the ONS cautioned that the rise was driven by stockpiling as manufacturers rushed to deliver orders before the original 29 March Brexit deadline.
Indeed, the data revealed that manufacturing output jumped by 2.2% in the first quarter, the fastest rate of growth recorded in the last 20 years. This sharp expansion was not a surprise as business surveys had previously revealed how manufacturers had been building up stocks of goods in case the UK left the EU without a transition deal, which it was feared could result in chaos at the UK’s borders.
However, the fact that many businesses did bring activity forward in preparation for Brexit does mean that stocks of finished goods now stand at historically high levels. Stock levels are therefore likely to be run down over the coming months and data from the latest monthly Confederation of British Industry (CBI) Industrial Trends Survey suggests that this process has already begun.
The CBI survey showed that the monthly order book balance fell to -10 in May from -5 in April, its lowest level since October 2016. This suggests that British factories have geared down from their rush to stockpile before the Brexit deadline, a move that will inevitably have a negative impact on UK economic growth during the second quarter of
The CBI has warned potential Tory leadership candidates about the consequence of a no-deal Brexit, as the Prime Minister’s announcement of her imminent departure has effectively put the Brexit process on hold until a new leader is elected.
On 24 May, Theresa May announced that she would be stepping down as the Conservative party leader on 7 June. In an emotional statement, the Prime Minister said she had done her best to deliver Brexit and expressed her ‘deep regret’ about being unable to do so.
The Tory party is now expected to elect a new leader, and the country’s next Prime Minister, by the end of July. And the person who is ultimately elected will clearly have a huge impact on how the Brexit process proceeds and is eventually concluded.
However, Mrs May’s decision to stand aside would appear to have increased the possibility of both a no-deal Brexit and Brexit not occurring at all. This is because the Prime Minister’s Brexit plan negotiated with the EU now appears to be in tatters, leaving no vehicle
for exiting the EU and a default position of departure on 31 October.
While the next Prime Minister may be able to negotiate an
improved deal, the EU have consistently stated that they have limited appetite for
change to the current deal and securing any further concessions will certainly
not be easy. This leaves the prospect of a
no-deal departure or a sufficient proportion of MPs uniting behind a second referendum.
Meanwhile, the CBI has issued a warning to Conservative leadership candidates who are actively supporting a no-deal Brexit. The business organisation’s director general Carolyn Fairbairn has said that a no-deal Brexit should not even be considered and suggested that such a policy “is not a responsible strategy for a government to have”.
Although the latest set of employment statistics once again shows that the UK labour market remains in a relatively robust state of health, the data did suggest that the recent growth in wages may have stalled.
According to data from the Labour Force Survey, the unemployment rate fell to 3.8% in the January to March period. This was the lowest reported figure since the three months from November 1974 to January 1975.
However, despite this drop in the unemployment rate, the data also revealed a slowdown in wage growth. Indeed, average weekly earnings including bonuses were reported to have risen by an annual rate of 3.2% in the three months to March, down from 3.5% in the previous three-month period. In real terms, total pay increased by 1.3% in the three months to March, down from 1.6% in the December to February period.
Furthermore, a recent industry survey has revealed that there is currently little upward pressure on wage growth. XpertHR, an organisation which specialises in analysing pay settlements, found that the median pay deal offered by major UK companies in the three
months to April was 2.5%, around the same level that was reported earlier in 2019.
Commenting on the latest data, XpertHR analyst Sheila Attwood said: “Many of the current pay awards are lower than employees received in 2018, suggesting that there is little scope for higher rises this year.”
Last month the BoE said that it expects wage growth to ease back to 3% by the end of this year. While the latest official statistics do show that wages are still currently rising at a rate above this forecast level, the data also suggests that wage growth pressures may have started to ease.