According to data released by the Office for National Statistics on Wednesday, UK inflation rose to a 10-month high of 3% in January. This was above economist forecasts of 2.8% and the December figure of 2.5%.
The increase was attributed to the higher cost of private school fees following the addition of VAT by the Labour government, airfares dropping less than usual in January, and higher costs of food and non-alcoholic drinks.
Services inflation rose from 4.4% in December to 5% in January, below expectations of 5.2%, and core inflation (which excludes energy, food, alcohol, and tobacco) met analyst expectations of 3.7%, up from 3.2% in December.
UK inflation rose to a 10-month high of 3% in January. This was above economist forecasts of 2.8% and the December figure of 2.5%.
Construction & Real Estate market outlook
Whilst house prices across the UK grew 4.6% in 2024 to an average of £268,000, prices in London stalled, failing to grow at all last year.
The average cost of a house in London still stands at the 2023 level of £549,000 as pressure on affordability due to higher interest rates deterred prospective buyers. Data from the ONS confirmed that some of the most affordable areas in the UK registered the strongest growth, for example, house prices in Northern Ireland were up 9% in the year.
The lack of growth could also be attributed to the types of property available, as flats, of which there are much more in London than other areas, registered half the growth other property types did in 2024. However, with households being unable to afford to buy in the capital, this has seen rents increase by 11%, much faster than the rest of the UK which saw an increase of 8.7%.
Households being unable to afford to buy in the capital, this has seen rents increase by 11%, much faster than the rest of the UK which saw an increase of 8.7%.
Corporate news
In corporate news, this week miners Rio Tinto and Glencore have revealed potential plans to cancel their London listings. Both companies are current constituents of the UK’s FTSE100 index, and the cancellations would be a blow to the UK’s historic status as a magnet for the global mining industry.
Although Glencore has not confirmed, it is anticipated the group may move the listing to New York as US investors increase their enthusiasm for investing in fossil fuels given the return of the Trump administration. The potential cancellation by Rio Tinto comes from a proposal by an activist investor (Palliser Capital), however, the Rio Tinto board has urged shareholders to reject the cancellation and retain the UK listing along with the primary listing in Australia.
The potential plans follow the move by industry peer BHP in 2022 to abandon its own London listing (although the Australian “depositary interests” line can still be traded through the London Stock Exchange).
Our specialist's final thought
"The potential cancellation by Rio Tinto comes from a proposal by an activist investor (Palliser Capital), however, the Rio Tinto board has urged shareholders to reject the cancellation and retain the UK listing along with the primary listing in Australia."
