June Update

National Update

Tariffs continue to shift daily: they were increased, they were reduced, they were delayed and they were changed as trade deals were done. The UK did deals with the US and India, and then with the EU. Stock markets seesawed around the world reflecting the Trump uncertainty.

At home, following its poor showing in the local elections, Labour has rowed-back on some of its policies in an attempt to regain popularity. They can gain some solace from the good growth figures, although we wait to see if they are sustained or just a blip.

Economy:

• Inflation Rates– In the Bank of England’s May report, inflation for April rose to 3.5%, above the 2.5% target. The main cause of the increase was due to various domestic bills such as electricity, water, gas, but also airfares, food and eating out added to the rise.
• Interest Rates– The Bank of England reduced interest rates by a quarter point to 4.25% in May. The BoE next meets on 5 June.
• GDP Growth – Quarterly growth for Q1 2025 was 0.7%, well above expectations, an improvement on the 0.1% growth for Q4 2024. Monthly real GDP growth is estimated to have grown by 0.2% in March 2025, following 0.5% in February and 0% in January.
• Pound against the Euro – Sterling has rallied against the Euro: 1 pound is currently worth 1.192 Euros. Against the Dollar, Sterling has also been strong, reaching $1.357 to the pound.
• House Market prices – Zoopla announced agreed sales hit a four-year all-time high with the UK Housing Market the busiest since 2021. The increased sales were attributed to increased affordability of mortgages and buyer demand.
• Unemployment rates– Kemi Badenoch, Conservative leader, came to blows with Labour MP Jake Richards over the exact figures of unemployment in the UK. Badenoch claimed that since Labour had come into power, unemployment has risen by 10%.  However, as Jake Richards MP pointed out, that this is factually incorrect as the number of people who are employed has risen by 14.5% since the election. However, the latest figure available does suggest that unemployment has risen to 4.53% for Q1 2025, a 0.2% increase on the previous quarter. Vacancies were down 5.3% for the three months to April 2025.

Bills in Parliament:

• Renters Reform Bill – The Renters Reform Bill is currently at the Lords and due to be passed. If given royal ascent, changes include landlords no longer being able to ask for months of rent paid in advance to secure a home, abolishing section 21 no-fault evictions and tackling unreasonable rent prices.
• Great British Energy Act – The Great British Energy Act establishes Great British Energy as a new government-owned, clean energy company. The government has stated it hopes this new company will aid in the creation of jobs and investment in the clean energy sector.
• Planning and Infrastructure Bill – The Planning and Infrastructure Bill is currently being debated in the Houses of Commons. The Bill aims to streamline the delivery of homes and critical new infrastructure.

Current Affairs

• New rules for unfinished sites: New proposed rules could see unfinished sites taken off developers and their land handed to local councils. This is to ensure housing is being built as quickly as possible and to encourage developers to keep to deadlines. They may also face thousands of pounds worth of penalties per unfinished home.
• Winter Fuel U Turn– Perhaps not unsurprising to some, Labour have made a partial U Turn on the Winter Fuel Allowance, which they had initially cracked down on. They have not completely changed their policies, stating they can only make ‘decisions they can afford’.  The Winter Fuel Allowance cuts were singled out as a key reason for Labour’s most recent poor local election results.
• Kier Starmer’s Brexit Reset Deal – A landmark deal was struck between the UK and the EU, as some call it, inching back to the EU. The deal includes smoother border management using egates, cooperating on emissions monitoring and an easing on regulation on food and drinks being imported and exported. There were also improvements made to defence and security alliances. A significant breakthrough was in fishing. The UK has now agreed to open its fishing waters to the EU for 12 years, an increase from the prior 5 years. However, the Youth Mobility Scheme still remains a point of contention and no agreement has been met yet on this.
• Reform made significant gains in Local Elections – Reform entered the local elections with 0 seats and ended the local elections winning 677 council seats. Reform’s unprecedented success in local elections has created serious questions for the two main political parties, both of which had underwhelming results.
• Minister explores plans to ease rules for small builders in England – The government is exploring plans to relax the rules for smaller building company to start bidding to develop new sites in England. Labour’s Housing Minister Angela Raynor released a set of proposals that would exempt small housebuilders from the usual environmental controls as well as the safety levy introduced in the aftermath of the Grenfell Tower Fire.
• Net Migration falls, but what does that mean for the skills shortage – It was reported in May that net immigration since 2024 has almost halved. This was attributed to a falling number of study dependents coming to the UK for educational pursuits. It has also been attributed to the last Conservative Government and their efforts to slow immigration down. However, it is speculated to have a knock-on effect on the already increasing skills shortage issue. The third contributing factor is also the declining number of skilled workers coming from the EU. The most affected industries are healthcare and infrastructure.