Speaking to the delegation at the LPM Conference, Emily gave an overview of the UK's Economic Outlook where she discussed interest rates, inflation, the residential and commercial property markets, as well as potential opportunities and risks in particular business sectors.
Emily dissected how the Labour party's promise to overhaul the economy is playing out, and considered the challenges, and opportunities, that small and medium sized law firm leaders must wrap into their strategic planning.
These are the key takeaways from Emily’s keynote:
- Inflation, having returned to target in September 2024, is on the rise again. But this should be temporary. Fiscal drag and higher employer National Insurance contributions will have a deflationary impact.
- The Monetary Policy Committee (MPC) is expected to cut interest rates twice more this year, starting in August.
- The housing market has been more resilient in the face of high interest rates than we saw in 2007. House prices are on the rise again despite April’s stamp duty changes. Commercial property, however, remains under pressure.
- GDP growth in 2025 has been weaker than hoped, but the Office for Budget Responsibility (OBR) projects 2% GDP growth in 2026, largely driven by public spending. Defence, green energy and construction will be the beneficiaries.
- Geopolitical uncertainty continues to pose upside risks to inflation.
- A lack of reliable UK employment data makes evaluating the impact of monetary and fiscal policy a challenge.