Britain’s Economic Malaise May Soon Come to America
UK property surveyors have painted a picture of a housing market cooling rapidly in the run-up to Labour’s November budget as fears of tax rises weigh on buyers and sellers alike.
Photographer: Chris Ratcliffe/BloombergIn the middle of 2022, UK households were saving around 5% of their incomes. By the end of 2024, they were saving more than 11%. One day everyone felt pretty good about the future. Spend spend spend. The next they were frantically hoarding cash. So what happened?
Wealth shock, says Peel Hunt’s Kallum Pickering. Thanks to the sharp and continued rise of UK gilt yields in October 2022, the Brits are poorer than they used to be. Their pension wealth has fallen sharply, particularly if they are near retirement and heavily exposed to “safe” bonds (bond prices fall as yields rise).