We expect sticky inflation, modest growth and a gradual pace of interest rate cuts to characterise the economy in 2025. 

As a result, this year is likely to show only a muted uptick in investment activity. Even so, pricing dislocation means stock-selective investors can still unlock historic value and income growth this year.

• Even though inflation is expected to remain above target in 2025, there is still good reason to expect further interest rate cuts, perhaps faster than markets currently expect.
• Despite numerous internal and external challenges, we still think economic activity will regain momentum over the course of 2025.
• In commercial real estate markets, 2024 recorded a 23% annual rise in investment volume, driven by strengthening demand in the residential, retail and hotel sectors. However, persistently high debt costs and slowing economic growth shows further recovery will not come easily. 
• Still, future supply pipelines remain limited, and considerable yield differentials have opened up within sectors, creating compelling opportunities to benefit from mispricing and inflation-beating prime rental growth.

Download the full report, or discover more from our Capitalise on the Future series.