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Tag: inflation

Construction will not come out unscathed from Osborne’s Budget, but it could’ve been worse

Construction will not come out unscathed from Osborne’s Budget, but it could’ve been worse

Given the potential for increased pain in the gift of George Osborne there will be a feeling that construction hasn’t come out as badly as it might have from the emergency Budget. But “unavoidably”, as Chancellor Osborne might say, the construction industry will have to share some of the pain for the folly of the banks as the nation seeks to balance its budget. There will however have been a great deal of relief when the Chancellor said that capital spending…

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Some comfort for house builders as inflation fears ease

Some comfort for house builders as inflation fears ease

The latest set of inflation figures showing a fall in the headline rate of the CPI index will provide a good degree of comfort to the interest rate setters at the Bank of England’s Monetary Policy Committee. And in turn this should provide some relief to those house builders who harbour fears about a rise in interest rates. At 3.4% the headline rate remains well above the 2% target and as such remains unsettling for those who fear that this…

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Plant hire prices reveal continued downward pressure on construction supply firms

Plant hire prices reveal continued downward pressure on construction supply firms

The evidence remains strong that prices in construction remain heavily squeezed despite the easing in the recession providing scope for many service providers to push up prices in other sectors. The ONS’s experimental services producer price indices provide data on price movements across a range of businesses providing services to other businesses. The selection includes construction plant hire. The aggregate figures suggest that inflation is once again pressing on business costs, with prices for freight forwarding, motor vehicle maintenance, computer…

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The problem with surprises on inflation

The problem with surprises on inflation

Could it be that we are about to witness the beginnings of widening concerns over rising inflation? The Consumer Prices Index “surprise” jump to 3.7% yesterday will certainly increase rumblings in the markets and elsewhere. Although for the time being I suspect  attention will be more focused on June 22 and George Osborne’s first budget, which could after all produce some pretty hefty downward pressure on inflation, if the output from the rumour mill has any value. However, if inflation does…

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The big question for Mr Shapps

The big question for Mr Shapps

I would like to be among those welcoming Grant Shapps to his new role as housing minister and wishing him well. I must admit I have not been particularly kind to his ideas to date. It’s my job to be critical I guess. But for the record I do have a degree of admiration for his fervent faith in localism, for which I have much sympathy, albeit with a shed load of doubts. Somehow it chimes with the anarcho-syndicalist spirit…

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Latest construction forecasts suggest there is more to fear than hope for

Latest construction forecasts suggest there is more to fear than hope for

The latest round of forecasting by construction experts paints a picture little changed from three months ago with little hope of significant growth, much uncertainty and the risks to growth heavily weighted on the down side. The general pattern they expect can be seen from the graph (right). It shows that after the biggest recorded annual fall since comparable records began in 1955 the forecasters expect a continued slide this year. There is some variation in views on this, with…

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Joy deferred as CIPS shows construction activity grows for first time in two years

Joy deferred as CIPS shows construction activity grows for first time in two years

So the construction activity indicator produced by the buyers’ body CIPS finally points to growth after two years of measuring falling workloads. But this seemingly uplifting moment appears to have brought little joy. The March figure popped its head above the 50 no-change mark on the back of rising activity in the housing and commercial sectors. But the survey also found more and deeper job cuts within the industry and there was a drop in the confidence within firms over…

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More home sellers, fewer home letters – a housing market in flux

More home sellers, fewer home letters – a housing market in flux

How should we read yesterday’s Rightmove figures showing the slowest ever March pick up in asking prices? They appear to be consistent with much of what else we are seeing in the market – a growing body of evidence that the recent bounce back in the housing market is faltering (see previous blog). The key factor slowing the rise in asking prices (see graph) Rightmove isolated was a rise in properties coming onto the market – up 34% on the…

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Was it just the cold or is it a relapse?

Was it just the cold or is it a relapse?

There are plenty of people, “experts” indeed, who fully expect a double-dip recession for both the economy and, for that matter, house prices. For them the data emerging for January’s performance appears to be, albeit gently, vindicating their position. They will no doubt seize with alacrity the retail figures from the British Retail Consortium showing the worst January sales data for 15 years. Those who take a different perspective will write the slump in sales off to the coldest January…

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Reasons to be careful – December’s higher than expected inflation

Reasons to be careful – December’s higher than expected inflation

Consumer Price Inflation at 2.9% in December and up from 1.9% a month earlier… mmm… that’s not what the experts expected. Not by a long way. This morning’s story from Reuters published ahead of the inflation figures had its poll of experts plumping for inflation at 2.6%. No doubt there will be a lot of post-announcement rationalisation about the figures from economist, but in truth the City and economists at large have consistently underplayed the strength of inflation in their…

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