Optimism about Britain’s economic prospects took a knock after unexpectedly weak official data from the manufacturing and construction sectors was released on Friday. ONS figures said that manufacturing output stagnated between October and November and construction output fell. The news prompted a slight downward adjustment in growth forecasts and took economists by surprise, given that the figures did not tally with unofficial business surveys pointing to swelling output, orders and confidence among manufacturing and construction companies. (FT, p.3) Although public and private housing construction have increased by 10 per cent and 13.8 per cent respectively in the first 11 months of 2013, in November there was also a 3.2 per cent fall in private new housing compared to the previous month. Duncan Kreeger, director at West One Loans said: “Gentle progress is encouraging for the property industry. But it won’t be fast enough to solve the crisis facing families in search of affordable homes, or businesses looking for the right location.” (Independent online)
More than three million middle-aged and retired people have given up saving for old age, believing that whatever they put aside will be taken away to pay for their care, according to new research from Age UK. The charity argues that the Government’s long-awaited overhaul of the care system, which is currently before Parliament, will fail if large numbers abandon saving for later life, because the system relies on individuals contributing to the cost of their care. The research found that almost three in 10 people aged over 50 believe there is “no point” in saving for their future needs.
David Cameron is accused by the Lib Dems of suppressing a report calling for thousands of new homes to be created in two new cities in southern England, in order to ease the housing shortage. (Telegraph, p.1) The proposed new settlements, which would contain tens of thousands of homes, could be built in Buckinghamshire, Warwickshire or Oxfordshire. The Lib Dems argue that the proposals are being side-lined for fear of a backlash in Tory heartlands ahead of the general election.
The number of people moving up the property ladder in 2013 reached a three-year high in 2013 as rising house prices boosted their equity, according to research by Lloyds Bank. Around 337,500 home owners with a mortgage moved last year, a three per cent increase on 2012 and the highest since 2010. (Express, p.22). Meanwhile, the number of £5m+ ‘superhomes’ being sold in London rose by a quarter last year, according to Savills, suggesting that the top end of the London market has not yet been hurt by higher stamp duty, the threat of mansion taxes, or the introduction of capital gains tax for foreign sellers. (Telegraph, p.16, FT, p.2)
All but the absolute banking elite are expected to be disappointed by this year’s city bonuses, according to the Independent (Jonathan Prynn, p.6). Disappointing results and ongoing restricting in a still recovering industry mean that many will be disappointed when informed of their bonuses ahead of annual results next week. A few so-called superbankers are expected to take home up to £6m, while those beneath them expected to take home the same pay or less as last year. A sizeable minority will end up with a “doughnut” – no bonus at all.