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CBRE does not expect a full economic recovery in the United Kingdom in 2024, but it will sees a turning point. Lower inflation and interest rates will improve real incomes and reduce the debt burden. This will encourage spending and investment from consumers and businesses, the report noted.
Weaker UK consumer demand could be a challenge for retailers and the industry, but as inflation drops and real incomes rise along with lower debt burdens, purchasing power will improve, creating a resurgence in demand in both sectors, CBRE noted.
Despite a lack of liquidity, refinancing may see enhanced investment activity in commercial real estate in 2024.
CBRE forecasts the country’s gross domestic product (GDP) will grow by 0.5 per cent this year and 1.6 per cent in 2025. Metrics suggest an interest rate cut may be imminent, with low headline inflation, weak economic growth and a softening labour market.
Some tax cuts expected in the spring budget would add a fillip to economic growth with the reduced tax burden, encouraging consumer spending. However, higher spending levels might slow the decline of inflation and delay the cutting of interest rates, CBRE observed.
Though the issue of lack of liquidity in the market persists, but refinancing throughout 2024 may see enhanced investment activity in commercial real estate at large discounts, according to the report.
CBRE expects to see the UK economy begin to turn this year. Consumer demand was resilient throughout the first half last year, but weakened in the second half as reflected in lower retail sales.
Fibre2Fashion News Desk (DS)
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