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Economic Data

Welcome to the ‘Economic Data’ section of Insight DIY, which includes a summary of all of the key UK economic indicators that you may need to know within your business. Each of these key indicators are updated as and when they are released by their various sources and provide a really valuable addition to any monthly report or business overview.

Nationwide House Price Index

House Prices

October 2021 Monthly Index*: 497.8 (September 2021: 494.6) 
Monthly Change*: 0.7% (September 2021: 0.2%)
Annual Change to October: 9.9% (to September 10.0%)
October 2021 Average Price: £250,311 (September £248, 742 not seasonally adjusted)

* Seasonally adjusted figure (note that monthly % changes are revised when seasonal adjustment factors are re-estimated)

Price of a typical UK home tops quarter of million pounds for first time

  • Annual house price growth remained elevated at 9.9% in October
  • Prices up 0.7% month-on-month
  • Average property price up by more than £30k since the pandemic struck

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:* Seasonally adjusted figure (note that monthly % changes are revised when seasonal adjustment factors are re-estimated)

“Annual house price growth remained elevated in October at 9.9%, albeit marginally lower than the 10.0% recorded in September. Prices rose 0.7% in month-on-month terms, after taking account of seasonal effects. The price of a typical UK home has now passed the £250,000 mark, an increase of £30,728 since the pandemic struck in March 2020.

“Demand for homes has remained strong, despite the expiry of the stamp duty holiday at the end of September. Indeed, mortgage applications remained robust at 72,645 in September, more than 10% above the monthly average recorded in 2019. Combined with a lack of homes on the market, this helps to explain why price growth has remained robust.  

“The outlook remains extremely uncertain. If the labour market remains resilient, conditions may stay fairly buoyant in the coming months – especially as the market continues to have momentum and there is scope for ongoing shifts in housing preferences as a result of the pandemic to continue to support activity.

“However, a number of factors suggest the pace of activity may slow. It is still unclear how the wider economy will respond to the withdrawal of government support measures. Consumer confidence has weakened in recent months, partly as a result of a sharp increase in the cost of living.

“Even if wider economic conditions continue to improve, rising interest rates may exert a cooling influence on the market, though the impact on existing borrowers is likely to be modest, as discussed below.

How much of a squeeze would an increase in Bank Rate exert on households?

“There has been increased speculation that the Bank of England’s Monetary Policy Committee (MPC) will increase interest rates in the coming months.

“Clearly, much will depend on the Committee’s assessment of the outlook for growth and inflation, but investors expect Bank Rate to be increased from its current record low of 0.1% before the end of the year – most likely to 0.25% or 0.5% – and perhaps reaching 1% within a year, though markets project they will remain close to that level in five years’ time.

“Providing the economy does not weaken significantly, the impact of a limited rise in interest rates on UK households is likely to be modest. This is partly because only a relatively small proportion of borrowers will be directly impacted by any change.

“Most lending on personal loans and credit cards is on fixed rates or tends to be unaffected by movements in the Bank Rate. Similarly, the vast majority of new mortgages have been extended on fixed interest rates in recent years.

“Indeed, the share of outstanding mortgages on variable interest rates (and which are therefore likely to see an increase in payments if Bank Rate is increased) has fallen to its lowest level on record, at c20%, down from a peak of 70% in 2001 and c60% in 2011.

“Moreover, even a 0.4% increase in rates (to 0.5%) is likely to have a modest impact on most borrowers who are on variable rates. For example, on the average mortgage, an interest rate increase of 0.4% would raise monthly payments by £28 to £625 (equivalent to c£335 extra per year), though a rise of Bank Rate by 0.9% (to 1%) would see typical payments go up by a more substantial £64 to £660 (an extra c£765 per year)."

Source: Nationwide House Price Index

Release Date: 3rd November 2021
Next Release Date: 3rd December 2021

Nationwide is the world's largest building society and one of the UK's largest mortgage providers. It has the longest unbroken run of house price data, stretching back to 1952 on a quarterly basis and 1991 on a monthly basis.  

GfK Consumer Confidence Index

GfK 150 x 112

Monthly Index: -17 (October 2021)
Previous Month's Index: -13 (September 2021)
Monthly Index Previous Year: -31 (October 2020)
Period: October 2021

Joe Staton, Client Strategy Director GfK, says: “After six-months of robust recovery in the first half of 2021, UK consumer confidence has taken a turn for the worse with all vital signs weakening. For two consecutive months five sub-measures have decreased and the headline score has dropped three months in a row. The sharpest concern is how consumers see the future economy with this collapsing ten points this month just as it did in September. Against a backdrop of cheerless domestic news – fuel and food shortages, surging inflation squeezing household budgets, the likelihood of interest rate rises impacting the cost of borrowing, and climbing Covid rates – it is not surprising that consumers are feeling down-in-the mouth about the chilly winter months ahead. Worryingly for British retailing in the run-up to Christmas, there’s a further decline in the intention to make major purchases. The financial mood of the nation has changed and consumers could do with some strong tonic to lift their spirits.”

Personal Financial Situation

The index measuring changes in personal finances over the last 12 months has dropped one point to -5; this is four points better than October 2020. 

The forecast for personal finances over the next 12 months has decreased four points to +1; this is only one point higher than this time last year.

General Economic Situation

The measure for the general economic situation of the country during the last 12 months is down three points at -46; this is 21 points higher than in October 2020. 

Expectations for the general economic situation over the coming 12 months have fallen by ten points to -26; but this is still 24 points higher than October 2020.

Major Purchase Index

The Major Purchase Index has decreased by four points to -10 in October; this is 17 points higher than it was this month last year.

Savings Index

The Savings Index has stayed the same at +22 in October; this is eight points higher than this time last year.

Release Date: 22nd October 2021
Next Release Date: 22nd November 2021  

Source: GfK

ONS: UK Retail Sales

Two female shoppers with bags retail shopping shutterstock_1230910540 150

The ONS has reported on retail sales for September 2021:

Main Points

 

  • Retail sales volumes fell by 0.2% in September 2021, following an upwardly-revised 0.6% fall in August; despite the fall in September, volumes were 4.2% higher than their pre-coronavirus (COVID-19) pandemic February 2020 levels.

  • Non-food stores reported a fall of 1.4% in sales volumes in September 2021, because of falls in household goods stores (negative 9.3%), such as furniture and lighting stores, and other non-food stores (negative 1.7%) such as sports equipment stores.

  • Automotive fuel sales volumes rose by 2.9% in September 2021 as demand towards the end of September increased sales; volumes were 1.8% above their pre-pandemic February 2020 levels.
  • Food store sales volumes rose by 0.6% in September 2021 and were 3.9% above pre-coronavirus pandemic levels in February 2020.

  • Despite relaxation of COVID-19 restrictions in summer 2021, in-store retail sales remain subdued; the proportion of retail sales online rose to 28.1% in September 2021 from 27.9% in August, substantially higher than the 19.7% in February 2020 before the pandemic.

Period: September 2021

Publication Date: 22nd October 2021
Next Release Date: 19th November 2021

Unless otherwise stated, the estimates in this release are seasonally adjusted.

Source: Office for National Statistics

Bank of England: Base Rate

Bank of England shutterstock_224846611 250

Current bank rate: 0.1%
Previous bank rate: 0.1%

Release date: 23rd September 2021
Next release date: 16th December 2021

Source : Bank of England

UK Consumer Price Index (CPI)

CPIH image

Main points for August 2021:

  • The Consumer Prices Index including owner occupiers' housing costs (CPIH) rose by 3.0% in the 12 months to August 2021, up from 2.1% in the 12 months to July.
  • The increase of 0.9 percentage points is the largest increase ever recorded in the CPIH National Statistic 12-month inflation rate series, which began in January 2006; however, this is likely to be a temporary change.
  • The largest upward contribution to change is a base effect, because, in part, of discounted restaurant and café prices in August 2020 resulting from the government's Eat Out to Help Out scheme and, to a lesser extent, reductions in Value Added Tax (VAT) across the same sector.
  • The largest upward contribution to the August 2021 CPIH 12-month inflation rate came from transport (0.87 percentage points) with further large upward contributions from restaurants and hotels (0.65 percentage points), housing and household services (0.65 percentage points), and recreation and culture (0.28 percentage points).
  • CPIH increased by 0.6% on the month in August 2021, compared with a fall of 0.3% in August 2020.
  • Restaurants and hotels, recreation and culture, and food and non-alcoholic beverages made the largest upward contributions to the change in the CPIH 12-month inflation rate between July and August 2021.
  • The Consumer Prices Index (CPI) rose by 3.2% in the 12 months to August 2021, up from 2.0% in July: the increase of 1.2 percentage points is the largest ever recorded increase in the CPI National Statistic 12-month inflation rate series, which began in January 1997; this is likely to be a temporary change.

  • On a monthly basis, CPI increased 0.7% in August 2021, compared with a fall of 0.4% in August 2020.

  • Football admissions became available in August 2021, meaning that there are no more CPIH items identified as unavailable because of lockdown restrictions.

Release Date: 15th September 2021
Next Release: 20th October 2021

Price indices, percentage changes and weights for the different measures of consumer price inflation. 

Source: Office for National Statistics

UK Producer Price Inflation (PPI)

Producer Price Index

Main points for August 2021: 

  • The headline rate of output prices showed positive growth of 5.9% on the year to August 2021, up from 5.1% in July 2021.

  • The headline rate of input prices showed positive growth of 11.0% on the year to August 2021, up from 10.4% in July 2021.

  • Other manufactured products and other produced materials provided the largest upward contribution to the change in the annual rate of output and input inflation respectively.

Release Date: 15th September 2021
Next Release: 20th October 2021

Source: Office for National Statistics

ONS: UK Labour Market

Job search laptop recruitment shutterstock_1044298738 150

Main points   

  • The most recent data show the labour market continuing to recover.

  • The number of payroll employees showed another monthly increase, up 241,000 to 29.1 million in August 2021, returning to pre-coronavirus (COVID-19) pandemic (February 2020) levels. All regions except London, Scotland and South East are now above pre-pandemic levels.

  • Following a period of employment growth and low unemployment, since the start of the pandemic the employment rate has generally decreased, and the unemployment rate has increased. However, since the end of 2020, both have shown signs of recovery. In the latest period (May to July 2021), there was a quarterly increase in the employment rate of 0.5 percentage points, to 75.2%, and a decrease in the unemployment rate of 0.3 percentage points, to 4.6%. The economic inactivity rate is down 0.3 percentage points on the previous quarter, to 21.1%.

  • Young people (those aged 16 to 24 years) have been particularly affected by the pandemic, with the employment rate decreasing and the unemployment and economic inactivity rates increasing by more than seen for those aged 25 years and over. Over the last quarter, however, there was a strong increase in the employment rate and decrease in the unemployment and inactivity rates for young people.

  • The number of job vacancies in June to August 2021 was 1,034,000, which is the first time vacancies have risen over 1 million since records began, and is now 249,000 above its pre-pandemic January to March 2020 level. Vacancies grew on the quarter in June to August 2021 by 269,300 (35.2%), with all industry sectors increasing their number of vacancies and the majority reaching record levels; the largest increase was seen in accommodation and food service activities, which rose by 57,600 (75.4%)

  • Growth in average total pay (including bonuses) was 8.3% and regular pay (excluding bonuses) was 6.8% among employees for the three months May to July 2021. However, annual growth in average employee pay is being affected by temporary factors that have inflated the increase in the headline growth rate: base effects where the latest months are now compared with low base periods when earnings were first affected by the coronavirus pandemic, and compositional effects where there has been a fall in the number and proportion of lower-paid employee jobs, therefore increasing average earnings.

Publication date: 14th September 2021
Next publication date: 12th October 2021

The level and rate of UK unemployment measured by the Labour Force Survey (LFS) using a definition of unemployment specified by the International Labour Organisation. Unemployed people as those without a job who have been actively seeking work in the past 4 weeks and are available to start work in the next 2 weeks. It also includes those who are out of work but have found a job and are waiting to start it in the next 2 weeks.

Source: Office for National Statistics

UK Gross Domestic Product (GDP)

British flag GDP growth shutterstock_473712160 150

Main points 

  • Gross domestic product (GDP) is estimated to have grown by 0.1% in July 2021, and remains 2.1% below its pre-coronavirus (COVID-19) pandemic level (February 2020).
  • Production output increased by 1.2% in July 2021 and was the main contributor to GDP growth; boosted by the reopening of an oil field production site, which was previously temporarily closed for planned maintenance.
  • Construction contracted for a fourth consecutive month, with output down by 1.6% in July 2021, and is now 1.8% below its pre-pandemic level (February 2020).
  • Services output remained broadly flat in July 2021, and remains 2.1% below its pre-pandemic level (February 2020).
  • Arts, entertainment and recreation activities grew by 9.0%, boosted by sports clubs, amusement parks and festivals, and reflecting the easing of restrictions on social distancing from 19 July 2021.
  • Output in consumer-facing services fell by 0.3% in July 2021, its first fall since January 2021 mainly because of a 2.5% fall in retail sales.

Next Release Date: 13th October 2021

Preliminary, second and final estimates of GDP released over a quarter as more data becomes available. The final estimate is published in the Quarterly National Accounts. GDP is the main measure of UK economic growth based on the value of goods and services produced during a given period.

Source: Office for National Statistics

BRC - KPMG Retail Sales Monitor

Couple walking with shopping bags shutterstock_130030334 150

Now we have passed the comparison period in 2020 that was under strict lockdown, this analysis will return to primarily reporting the sales results on a year-on-year basis. However, for certain measures the two-year comparison will remain useful and will be clearly signposted.

Covering the four weeks 1 – 28 August 2021

  • On a Total basis, sales increased by 3.0% in August, against a growth of 3.9% in the same month last year. 
  • This is below the 3-month average growth of 6.9% and the 12-month average growth of 10.3%.

Helen Dickinson OBE, Chief Executive | British Retail Consortium
“As post-lockdown pent-up demand has softened, the growth in retail sales we have seen over the past few months slowed for August. Nonetheless, we still saw growth above pre-pandemic levels, as people returned to stores in greater numbers. With wedding season in full swing and workers gradually returning to the office, formalwear was a strong performer. Additionally, the bank holiday weekend and back-to-school buzz contributed to a rise in non-food sales. While the online sales growth has begun to slow, it is still high when compared with pre-pandemic growth rates. This demonstrates how the pandemic has shifted the digital-physical shopping balance and increased the linkage between the two channels.”

“With a precarious economic backdrop and retailers grappling with higher costs across the supply chain, the Government needs to deliver on its promise to reduce the burden of business rates that are holding back investment in recovery from the pandemic. If not, we will see the number of shuttered stores continue to rise and more jobs lost. This will seriously impact communities right across the country, and those already most economically deprived will be hit the hardest, putting the levelling up agenda in jeopardy.”

Don Williams, Retail Partner | KPMG
“Much like the summer weather retail performance in August was mixed.  Sales growth on the high street continued to slow, with footfall still below pre-pandemic levels and online sales took a retreat from the highs of last year, whilst some discretionary non-food categories continued their recovery.

“Overall, the high street saw 3% growth, dented by lower food sales growth of 1.9% as consumers enjoyed a fully re-opened hospitality sector.  Online sales fell back by -2.5% compared to August 2020, though online penetration rates remained significantly above pre-pandemic levels, signalling the step up in online shopping is here to stay.  Clothing, footwear and accessories continued their recovery with some healthy sales increases but from a much lower base, whilst technology and furniture/appliance categories suffered against very strong comparatives in 2020. 

“With the retail recovery showing signs of slowing, the sector is expected to grow at a more muted rate as retailers face increasing challenges on a number of fronts. Inflation is expected to accelerate putting pressure on household spending, whilst retailers battle for share of wallet as consumers spend money on leisure, entertainment and travel.  Staffing pressures remain and supply chain issues are being widely reported, with raw material shortages and challenges getting product into the UK and getting goods into customers‘ hands.  This may feed into limited availability of certain products and the spectre of price rises remains. 

“Retailers will be pinning their hopes on a more predictable normal with white collar workers returning to city centres in greater numbers from this month and a buoyant Christmas fuelled by some of the savings that consumers have made over the last 18 months of lockdown and restricted spending.  Nonetheless, successful retailers will have to work very hard to ensure the right availability of the right product to satisfy the requirements of an ever more demanding customer.”

Food & Drink sector performance | Susan Barratt, CEO | IGD
“Food and drink sales in August were broadly flat on 2020’s performance, with some spending switching from retail back into the out-of-home sector. Despite sales being limited by the dull weather, they were supported by staycations and the late summer Bank Holiday, which helped sales show a small amount of growth.

“IGD’s Shopper Confidence Index remained strong, continuing to hit one of the highest levels in the last five years. However, concern around inflation continues, with IGD’s ShopperVista revealing that 79% of shoppers expect food and grocery prices to get more expensive in the year ahead, up from 75% in July ’21. With much of the economy now open, more shoppers are changing what they spend their money on; some 73% have spent more on products and services in August, compared to 69% in June ’21 and 31% are spending more on eating and drinking out, compared to 22% in June ’21.”

Release Date: 7th September 2021 
Next Release Date: 7th October 2021

Source: BRC and KPMG

UK Construction Purchasing Managers' Index (Markit and CIPS)

Markit IHS 150 x 112.jpg

Index: 55.2 August 2021
Previous month: 58.7 July 2021

Construction activity rises at softest pace since February

Key findings:

  • New order growth eases to five-month low 
  • All three monitored segments record softer rises in activity 
  • Second-fastest rise in input prices amid severe supply chain disruption

The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Manager's Index (PMI) is a diffusion index incorporating survey results provided by construction firms throughout the country. A reading above fifty suggests the construction sector is expanding, while a reading below fifty suggests the construction sector is in contraction. Policymakers and traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, rather than waiting for the hard data to emerge.

Publication date: 6th September 2021
Next publication date: 4th October 2021

Source: Markit Economics

UK Manufacturing Purchasing Managers' Index (Markit and CIPS)

Markit IHS 150 x 112.jpg

Index: 60.3 August 2021
Previous month: 60.4 July 2021

Rising supply chain constraints lead to slower production growth and rising input prices in August

Key findings:

  • UK Manufacturing PMI at 60.3 in August
  • Output growth slowdown exacerbated by input supply issues 
  • Input cost and selling price inflation remain close to survey records

Publication date: 1st September 2021
Next publication date: 1st October 2021

Source: Markit Economics

UK Population Figures

UK Census

UK population: 66,436,000 (mid 2018)
UK population: 66,040,229 (mid 2017)
Percentage change: +0.6%

2018 Data:

Male: 32.8 million (49.4%)
Female: 33.6 million (50.6%)

Estimated population of England: 55,977,000 (84.3% of the UK’s population)
Estimated population of Scotland: 5,438,000 (8.2% of the UK’s population)
Estimated population of Wales: 3,139,000 (4.7% of the UK’s population)
Estimated population of Northern Ireland: 1,882,000 (2.8% of the UK’s population)

Mid-year population estimates relate to the usually resident population. They account for long-term international migrants (people who change their country of usual residence for a period of 12 months or more) but do not account for short-term migrants (people who come to or leave the country for a period of less than 12 months). This approach is consistent with the standard UN definition for population estimates which is based upon the concept of usual residence and includes people who reside, or intend to reside, in the country for at least twelve months, whatever their nationality.

Data last updated: June 2019
Next update: June 2021

Source: ONS

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Max Crosby Browne - CEO, Home Decor
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