Connect with us
Advertisement
Advertisement

Business

UK inflation falls to 2.3%, raising questions over interest rate cuts

Published

on

UK inflation has dropped to 2.3% in April, marking its lowest level in nearly three years. However, the decline fell short of analysts’ expectations, dampening hopes for an imminent interest rate cut by the Bank of England.

City analysts had anticipated a reduction to 2.1%, closer to the Bank’s 2% target. This discrepancy led markets to adjust their forecasts, now predicting that the Bank’s current rate of 5.25% may not be reduced until August, rather than next month as previously speculated.

The Office for National Statistics (ONS) reported that the decrease from March’s 3.2% was primarily due to lower energy and food costs. The last time inflation was this low was in July 2021. Significant contributions to the drop included a record 27% fall in electricity and gas prices over the past year and a modest 2.9% annual rise in food and soft drink prices, the smallest increase since November 2021.

Illustrating the ongoing strain on household budgets, furniture retailers reduced prices by 0.9% between March and April, while overall goods prices dropped by 0.8% month-on-month. However, annual services inflation, reflecting inter-company charges, remained stubbornly high at 5.9%, only slightly down from March’s 6%.

Despite the overall fall in the consumer prices index (CPI), the ONS noted that higher property rents and mortgage costs kept the alternative CPIH measure, which includes housing costs, elevated at 3% year-on-year. Petrol and diesel prices rose last month, although the price of Brent crude has recently stabilised around $83 (£65) per barrel.

KPMG UK’s chief economist, Yael Selfin, suggested that the chance of an interest rate cut next month had diminished. “Falling inflation nears the Bank of England’s target but may not suffice for an early rate cut,” she stated. Echoing this sentiment, Paula Bejarano Carbo of the National Institute of Economic and Social Research noted that core inflation, which excludes volatile food and energy prices, remains high at 3.9%. Combined with robust wage growth, this persistence could compel the Bank’s monetary policy committee to maintain rates.

Prime Minister Rishi Sunak heralded April’s CPI figure as a “major moment for the economy, with inflation back to normal,” asserting that it validated the government’s economic strategy. Conversely, Shadow Chancellor Rachel Reeves argued that it was premature for the Conservatives to celebrate, highlighting the ongoing pressures of soaring prices, mortgage bills, and taxes.

In the eurozone, inflation held steady at 2.4% in April.

Separate ONS data indicated a larger-than-expected rise in public borrowing for April, with the monthly deficit reaching £20.5bn. Despite a decrease in debt payments, the high cost of servicing government debt exceeded expectations, potentially ruling out pre-election tax cuts.

Economic adviser Martin Beck from the EY Item Club described the public finance figures as disappointing, suggesting that continued higher borrowing costs would likely prevent any significant fiscal easing before the next general election.

Welsh Conservative Shadow Minister for Economy and Energy, Samuel Kurtz MS, praised the inflation drop, attributing it to the UK Conservative Government’s effective economic policies. He called on the Welsh Labour Government to support the economy by fully implementing business rates relief and reforming growth taxes.

Paul Butterworth, CEO of Chambers Wales South East, South West, and Mid, noted that while the reduction in inflation was significant, it remained above the Bank of England’s target. He expressed hope that the continued downward trend might prompt an interest rate cut soon.

Meanwhile, the British Association for Counselling and Psychotherapy (BACP) warned that despite the fall in inflation, the cost of living crisis continues to severely impact mental health. Their recent survey revealed that 74% of respondents felt their mental health was worsened by the crisis, with particularly high impacts on those with pre-existing conditions, women, ethnic minorities, and lower-income households.

BACP’s Director, Dr Lisa Morrison Coulthard, emphasised the need for government action to address these mental health challenges. The BACP has proposed a 13-point action plan to improve access to mental health services, stressing the importance of funding and support for vulnerable populations.

As the nation grapples with economic and mental health pressures, the government’s response to these intertwined issues will be crucial in the coming months.

Business

New development planned next to Clynderwen rail station

Published

on

PLANS to site public use storage containers close to a Pembrokeshire village’s railway station have been submitted to county planners.

The application by S Fussell, through agent Gethin Beynon, seeks permission to site the 25 containers on an existing storage yard by Clunderwen railway station.

A supporting statement accompanying the application says: “The application seeks permission to site 25 containers to serve as a storage facility for a public use. The application site is located immediately to the north of the Clunderwen railway line and forms an existing storage and laydown yard.”

It adds: “The containers would all be accessed and open from the north elevation. The container frontage would be fenced off via post and rail fencing for security purposes with parking for 9 vehicles being provided. A turning head to the northwest of the site would be provided to provide accessibility to and from the storage compound. In terms of material finishes the containers would be of a conventional rectangular form and be constructed from steel.”

It says the proposal would “have a positive economic and social impact through employment construction via the development,” with minimal environmental impacts, based on the containers being sited in an existing storage and distribution yard, adding: “In terms of the proposal’s scale design and character, the modular form of the containers being adjacent to the railway line are in keeping with the immediate semi-industrial character of the area.”

The application will be considered by planners at a later date.

Continue Reading

Business

Ceredigion sheep shed allowed to stay open as wedding venue

Published

on

A CALL to allow a sheep shed once owned by Aberystwyth University to remain as a wedding venue, the applicants even having their own wedding there, has been granted by Ceredigion planners.

Dyfrig and Emily Williams, through agent JMS Planning and Development, sought retrospective planning permission for the change of use of the shed at beef and sheep farm Tanygraig Farm House Tanygraig, Llanfarian, some three miles from Aberystwyth.

The building, part of an agricultural holding once owned and operated by Aberystwyth University as a ‘learning farm,’ was partly converted to host weddings in September 2022.

A supporting statement accompanying the application, by JMS Planning, said: “The proposal seeks to formalise the change of use of an existing agricultural outbuilding to a wedding venue and associated works,” adding: “Prior to the applicant’s ownership, the agricultural holding was owned and operated by Aberystwyth University and utilised as a ‘learning farm’, whereby students would attend site and undertake studies.”

After an initial successful one-off use of the shed as their own wedding venue, the applicants pondered with the idea to keep the shed as a wedding venue.

The statement said no major work has been undertaken at the site, retaining the original character of the building, which is expected to host 15 weddings a year.

“The venue has already hosted a few weddings and has developed an excellent reputation, which is supported by the local community and local businesses many of which have benefited from the venue,” the statement said.

“Jobs, wealth and income has been created as a result of the venue, from initial construction works e.g plumbing and electrical works, to those associated with the wedding industry, which will continue moving forward. The proposal would therefore be considered a source of many jobs, including retaining jobs in existing businesses.

“Although the main occupation of the applicants will remain, they will be heavily involved with the preparation, management and promotion of the business.”

Local community council Llanfarian has raised concerns about the retrospective nature of the application, and about access to the main road for wedding traffic.

The scheme has now been granted conditional approval by Ceredigion planning officers, with conditions including restrictions on amplified music.

Continue Reading

Business

Demand for Welsh homes surges as market sees fastest growth in three years

Published

on

THE demand for homes in Wales has risen at the fastest rate since 2021, according to the latest Royal Institution of Chartered Surveyors (RICS) Residential Market Survey. The report reveals a surge in buyer enquiries as more properties enter the market.

In August, a net balance of 50% of survey respondents in Wales reported an increase in new buyer enquiries, marking the highest level of activity seen since May 2021. This uptick in demand coincides with a rise in the number of homes available for sale. A net balance of 57% of Welsh respondents reported an increase in new instructions to sell, a sharp jump from 30% in July.

With both demand and supply on the rise, it is no surprise that sales have also seen an uplift. A net balance of 30% of surveyors in Wales reported an increase in newly agreed sales in August, positioning Wales as the second-highest region in the UK, behind Northern Ireland.

Looking ahead, surveyors remain optimistic about the sales outlook, with a net balance of 12% of Welsh respondents expecting sales to increase over the next three months.

However, house prices in Wales have not followed the same upward trend. Over the last three months, a net balance of -30% of Welsh surveyors reported a fall in home prices, which is lower than the UK average, where prices were reported as flat. Welsh surveyors are also cautious about the near-term price outlook, with a net balance of -22% expecting prices to drop further over the next three months.

In the rental market, demand for lettings continued to rise in August, with 50% of Welsh surveyors reporting an increase in tenant demand. However, the supply of rental properties continued to fall, albeit at a slower rate. A net balance of -17% of respondents noted a decline in rental supply, an improvement from the -33% reported in July. With the imbalance between supply and demand persisting, a net balance of 17% of surveyors expect rents to rise over the coming months.

Anthony Filice, FRICS of Kelvin Francis Ltd. in Cardiff, commented on the sales market, saying: “Appraisals and instructions remain strong. While there are fewer viewers, they are more serious, helped by more favourable mortgage rates. Some sellers with unrealistic pricing expectations are adjusting, leading to sales at lower prices than previously achievable.”

Melfyn Williams, MRICS of Williams & Goodwin The Property People Ltd. in Anglesey, added: “The market is active but not as buoyant as before. Buyers are cautious yet still purchasing, and sellers are concerned but continuing to sell. Activity is down, which is typical for August, but overall, the market remains steady despite seasonal and economic factors.”

In the lettings sector, Paul Lucas, FRICS of R.K. Lucas & Son in Haverfordwest, noted: “Rents continue to rise as the availability of property declines. Many landlords and holiday homeowners are selling due to increased taxation and rental regulation pressures.”

On the wider UK market, RICS Chief Economist Simon Rubinsohn highlighted improved sentiment, noting, “The latest RICS survey shows a lift in buyer interest following a modest fall in mortgage rates, with stock levels also inching up. However, there is still a need for realistic pricing to finalise deals, with uncertainty around future interest rate cuts and the forthcoming Budget keeping market sentiment cautious.”

Rubinsohn added that while affordability remains a challenge in the sales market, it is even more pressing in the lettings sector. “The ongoing reduction in rental stock, as landlords downsize their portfolios, is exacerbating the imbalance in the market.”

As the housing market in Wales continues to evolve, the coming months will determine whether the current surge in demand can sustain momentum amidst broader economic uncertainties.

Continue Reading

News14 hours ago

Kayaking drill sparks emergency response in Fishguard

AN EMERGENCY response was sparked yesterday afternoon when a kayaking group practicing a capsize drill was mistaken for a kayaker...

Crime2 days ago

Man with limited mental capacity sees child grooming conviction overturned

A WEST WALES man, initially convicted of grooming and sexually abusing a 13-year-old boy, has been acquitted after a trial...

News3 days ago

Local Conservatives condemn Winter Fuel Payment cut

AROUND 21,000 pensioners in Mid and South Pembrokeshire are set to lose up to £300 in Winter Fuel Payments after...

Education3 days ago

Pandemic impact on Welsh reading standards still felt, says Estyn

A NEW report by Estyn has highlighted the ongoing negative impact of the COVID-19 pandemic on pupils’ Welsh reading skills,...

News3 days ago

Eluned Morgan unveils new cabinet as Mark Drakeford takes on finance role

WALES’ First Minister, Eluned Morgan, has revealed her newly appointed cabinet just days after her predecessor, Vaughan Gething, announced he...

News4 days ago

Pembrokeshire’s new MP votes to cut the Winter Fuel Payment

MPs have voted to drastically reduce the winter fuel payment, restricting it to only the country’s poorest pensioners. A Conservative-led...

News5 days ago

Prince William visits Wales amid positive news on Kate’s health

PRINCE WILLIAM, the Prince of Wales, made a visit to Wales on Tuesday (Sept 10), just a day after Princess...

Business5 days ago

Ministers approve £500m Tata Steel subsidy but Tories say it ‘falls short’

MINISTERS have confirmed an agreement providing Tata Steel with a £500 million grant towards its transition to electric arc furnace...

News5 days ago

National review urges reform of Welsh Fire and Rescue Authorities

A MAJOR new report has highlighted significant weaknesses in the governance of Wales’ Fire and Rescue Authorities (FRAs), calling for...

News5 days ago

Local police assisted by National Police Helicopter in Milford Haven search

RESIDENTS in Haverfordwest and Milford Haven were left concerned last night after a significant police presence and a low-flying helicopter...

Popular This Week