Fiscal Policy and Economic Backdrop
Winter 2023

Commentary⁴ from HSBC UK expects the recession which began in the third quarter of 2022 to be short and mild, with GDP expected to contract by slightly more than 1% in 2023, but with growth returning later in 2023. Deutsche Bank’s quote in Money Week is broadly in line with this, although Nomura is more bearish, expecting a contraction of just over 2%. Given what the Bank of England has said, HSBC does not expect more than another 25 basis point increase in interest rates, while Nomura thinks they could peak at 4.5% in Q1 2023.

Forecasts for the UK economy: a comparison of independent forecasts for 2023

Fiscal

The government has confirmed that it is still considering bringing in qualifications and minimum standards for property agents – despite it being four years since Regulation of Property Agents working group first recommended it. Early this year, Housing Minister Lucy Frazer said she is considering regulations. When combined with changes in the Rental Reform Bill– should it pass – which will change the way rent increases are handled and a general rebalance of the market in favour of tenants then the demands on agents could increase significantly. This could be a key driver to increased professionalism in property agency.

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⁴ HSBC: Outlook for the UK economy in 2023: a getting-better sort of year 10 Jan 2023