34. Weekly Newsletter

UK Stock Shortages

Some analysts have now started to point to a slower recovery in the UK economy due to a variety of causations. The HIS/CIPS Composite Purchasing Managers’ Index (PMI) hit a sixth month low for August (scoring 55.3)- scoring below the Eurozone average and USA. The group attributed this to the “worst shortages of staff and materials on record” which are holding back the recovery. Manufacturers, for instance, are grappling with staff being forced to self-isolate coupled with unfilled job vacancies- whilst shipping costs keep rising.

In the Financial Times, it was reported that the economic recovery was “starting to be choked off by supply constraints”, and that goods export orders were weaker than in the Eurozone for an eighth consecutive month- potentially as a result of Brexit. Another challenge towards the end of the year has also discussed this week, in the BBC, relating to likely stock shortages for Christmas and the estimated shortfall of 90,000 lorry drivers.

COVID Update

Over 6.5m people in the UK have tested positive for COVID and with almost all restrictions lifted: cases are slowly rising again but hospitalisation rates remain far below previous highs. A total of over 131,000 deaths have been attributed to the virus and are disproportionality led by the unvaccinated. Nationally, 47.7m people (88% of adults) have received their first vaccine and approximately 42m of these patients have also received their second dose. This brings the total number of inoculations carried out, by the private sector and National Health Service, to near 90 million.

The UK’s Vaccine Taskforce additionally negotiated a contract for a further 35 million more Pfizer/BioNTech vaccines to be delivered in Q2 of 2022 in a bid to “future-proof the country from the threat of COVID”. The Health Secretary, Javid, has gone on to state that “95,200 lives” have been saved by the vaccine rollout among the over-65s alone; another aspect of the nation’s response to the pandemic includes a £528m commitment to help distribute 1.3bn doses to 92 developing countries this year.

Northern Growth

A gap between the economic prosperity in the North and South of England has long been at the forefront of debate in the UK; however, the property price boom (albeit of lower values) is being led by regions with traditionally smaller growth. In the first half of 2021, property prices rose by 18.6% in the North West and 15.8% in Yorkshire and the Humber. Comparatively, London experienced a subdued, but valuable, rise of 6.3% to around £500,000 on average per home (the North West sits at £190,000). Other disparities in growth included disproportionally high demand for coastal and ‘commutable’ rural locations.

The northern cities of Manchester and Liverpool have also been identified as post-COVID employment ‘hotspots’ following the current strong jobs surge and rising desirability. Between 2013 and 2019, Manchester and Liverpool’s private sector net job creation grew by 20%, according to HSBC. Anglo-Swedish brands such as Klarna and Henri Lloyd already operate office in Manchester; the city also boasts the Head Offices of PZ Cussons, The Hut Group and two of the most globally famous football teams.

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