Leading Indicators | UK pay pressures ease, FTSE 100 maintains momentum - an improved UK CRE outlook
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Here we look at the leading indicators in the world of economics.
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Labour market continues to cool
The UK's unemployment rate fell to 4.1% in the three months to July 2024, while average earnings (excl. bonuses) rose 5.1%, marking a two-year low. This has strengthened expectations that the BoE will soon resume its easing cycle. Although no rate cut is anticipated at next week’s MPC meeting, markets are pricing in successive cuts in November and December.
While the FTSE 100 keeps its pace…
London’s FTSE 100 index has risen by +6.5% year-to-date, trailing behind the S&P 500's +13.4% gain. While the US’s outperformance is primarily driven by a few key stocks, recent M&A activity in UK REITs highlights the growing appeal of UK companies.
And UK CRE forecasts upgraded, with Retail Warehouse poised to lead
In line with expectations for the wider economy, the outlook for UK CRE has strengthened. In the latest IPF survey, the All Property total return forecast for 2024 has risen by 30bps to +5.7%, up from +5.4%. Retail Warehouses are projected to be the top-performing sector between 2024-2028, with an annual total return of 9.3%.
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