It is still clearly early days into the chaos in the financial markets following the Chancellor’s ‘Mini Budget’. The CPA Summer forecasts certainly didn’t have banks stopping lending for mortgages (40% of all mortgage products had been withdrawn as of Thursday morning) or the Bank of England having to do £65 billion of Quantitative Easing otherwise all pension providers becoming insolvent on our list of key risks. However, there are some impacts for UK construction that we can identify.
The depreciation in Sterling will lead to further increases in construction materials inflation. It’s worth keeping in mind that construction materials prices in July 2022 were already 24% higher than a year earlier and 46% higher than in January 2020, pre-pandemic. Sterling has depreciated 12% against the Dollar since the end of July. This will exacerbate cost inflation as depreciations in Sterling increase the price of imports.
FIS Members can read the full report CPA – Impacts of Recent Market Chaos on UK Housing and Construction here