The UK economy started the year well, but businesses and consumers remain cautious in the face of higher-for-longer inflation and interest rates.

In real estate markets, a General Election should provide some welcome stability, but restrictive debt costs remain the primary challenge for investors.
 

• Real GDP grew by more than expected in Q1 2024, as rising real-terms incomes contributed to strong services sector growth.
• Regardless of the result of July’s General Election, the UK’s stretched fiscal position will lead to difficult decisions on the balance between spending and taxation later this year.
• The path forward for interest rates remains the primary issue for real estate markets, but investors have generally welcomed the prospect of political certainty sooner rather than later.
• Investment volume remains subdued but the growing sense that pricing is at an inflection point is translating into more disposals being brought to market, most notably in regional office markets.

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