In his reflections on the upcoming Autumn Budget, Occupier Advisory Director, Stephen Downey, addresses the concerns and opportunities it may present for occupier clients, blending economic analysis with a pragmatic view on the future.
The Government warning that this Budget will be painful has created uncertainty in our market place. This has resulted in consumer confidence indicators dropping dramatically since the end of August. There will be no surprises as the expectation is tax rises and spending cuts. While uncertainty and dropping confidence are not good ingredients for our markets,it’s worth noting that, so far, our clients are not pulling back on their planned investments.
On top of these painful Budget expectations some of our clients are already expressing concerns that the new Government seems to be coming down more in favour of flexible working than its predecessor, with plans to increase employment rights. This may suit some organisations, yet could make investment and planning for the work place uncertain and even more difficult to balance ‘back to the office’ initiatives against working from home.
The Labour Government manifesto played heavily on growing the economy, which now seems to have taken a back seat to address filling the £22billion black hole – which most commentators agree can only come about in the short term by raising taxes. This seems at odds with a Growth agenda which can only dent confidence in a business and investment environment.
On a brighter note, key economic indicators are moving in the right direction. Inflation is at 2.2% just above the Banks 2% target, UK interest rates are now at 5% with the expectation of a drop in Autumn. This is also encouraged by the American Federal Reserve recently bringing interest rates down by 0.5%.
At Newsteer we hope the Government ‘s cautionary messaging around the Budget may be an overestimation, meant to manage expectations. With any luck, come November we will see a drop in interest rates. For now we remain cautiously optimistic ……. the glass is still half full.
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About Stephen Downey:
Stephen is an expert in advising occupiers,guiding clients through complex market transactions and economic shifts. Aligning real estate requirements to support business decisions. He works closely with clients to help them navigate the evolving real estate landscape, balancing strategic business planning with immediate market demands. Known for his keen understanding of occupier needs and his ability to provide insightful, practical solutions, Stephen offers a unique perspective on how economic policies and market trends impact business decisions.