Offices | UK Economic and Real Estate Briefing – December 2023

The measures announced in the Autumn Statement reinforced our view that Bank Rate will be held at 5.25% until mid-2024. Meanwhile, with inflation and swap rates now on a downward trajectory, real estate investor confidence continues to improve.

• The Chancellor shifted the narrative from fiscal prudence to economic growth in the Autumn Statement, spending almost all of the addition ‘headroom’ given to him by the OBR’s improved forecasts.
• However, with the OBR’s projections for economic growth much more generous that the Bank of England’s, that headroom against fiscal targets is likely to remain tight and, in turn, constrain fiscal policy.
• The Autumn Statement contained some welcome announcements for real estate, but investors’ main concerns remain the outlook for inflation and swap rates
• Real estate investors are beginning to look ahead to the next 12 months with confidence that price discovery will improve and attractive opportunities will arise.

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