Leading Indicators | Inflation Stability, Office Revival, and the UK’s Misery Index
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Here we look at the leading indicators in the world of economics.
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UK inflation remains unchanged at 2.2% in August
UK inflation held steady at 2.2% in August, below the BoE’s forecast of 2.4% and in line with market expectations. Notably, services inflation rose from 5.2% to 5.6%. Eurozone inflation matched the UK at 2.2%, and US inflation slowed for the fifth consecutive month to 2.5%. Oxford Economics predicts that UK inflation will pick up to 2.5% by year-end, driven by the fading drag from energy price effects.
Are we seeing a shift in remote working?
The latest ONS BIC survey reveals that only 21.2% of businesses currently adopt or plan to implement remote working as a long-term strategy, a figure that has seen minimal change over the past 4 years. Despite the possibilities of remote work, we see a clear shift to office-centric workstyles – either hybrid or office-only approaches such as that announced by Amazon last week, which will see a five-day a week return to office from January 2025.
UK Economic Misery dips to its lowest level since early 2021
The Misery Index, a 1970s economic indicator combining unemployment and inflation, has reached its lowest level since early 2021, driven by easing inflation and a softening labour market. This decline, coupled with potential interest rate cuts, may set a favourable economic stage for the Labour government as they prepare to unveil their key fiscal strategies ahead of conference season.
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