Wrap Up

Business Wrap Up October 2023

Distilled Post Editorial Team

Unemployment on the rise

It’s anticipated that the Bank of England will hold interest rates at their current level - 5.25% - after figures were released suggesting a slowing of growth in the jobs market. Figures released by the ONS indicated that unemployment had risen to 4.2% in June - August, an increase on the previous quarter. Meanwhile, further data released showed that the number of people in work fell by 82,000. The Bank of England is set to decide on whether to increase the cost of borrowing on 2nd November.

Britons buying less in the buildup to festive season

Forecasters have announced that they expect Britons to significantly curb their spending as the festive season approaches, with fingers pointing towards the ongoing cost of living crisis as an explanation. Online spending for Black Friday on the 24th November are anticipated to be down by 2% from last year, while the IMRG trade body has predicted sales of gifts to be down by 11% on 2022. The decrease in sales has already been seen in data released by the ONS which showed that the volume of clothing sales fell by 1.6% in September from August. Experts have suggested that with money saved over lockdowns spent over the festive season in 2022, the disposable income available to many families this year has significantly decreased, in the wake of persistently high inflation.

UK house prices fall dramatically

Rising interest rates have pressured the UK’s housing market, with Nationwide’s House Price Index, released earlier this month, revealing that UK house prices have fallen by a hefty 5.3% in the year to September. The price of an average home in the UK was £257,808 in September, which is almost £14,500 lower than just a year ago. Experts have suggested that the market’s slowing can be attributed to high interest rates, which themselves are the product of continued disruption from the Covid-19 pandemic and Russia’s war in Ukraine. 45,400 mortgages were approved for purchase in August, and Nationwide confirmed that this figure rests at about 30% below the monthly average in 2019, before the Russia-Ukraine conflict and the pandemic. The decline has been most evident in the South-West of England, where house prices have dropped more than 6.3% in the last quarter.