London’s rental market bounces back

London’s rental market bounces back

The Noise

  • London’s rental market is back with a vengeance dismantling doubts that the pandemic might kill off the London property market. Rental values rose month-on-month for the first time since the pandemic, as the steep declines experience over the past 17 months begin to decline.
  • Nonfarm payrolls rose by a seasonally adjusted 943,000 in July, the best gain in 11 months. Unemployment rates fell to 5.4% last month from 5.9% in June, the lowest level since March 2020.
  • GCSE and A-Level results were out this week with a record number of students getting A grades or higher after exams were cancelled for a second year in light of pandemic disruption. Comprehensives doubled the proportion of top A-level grades, but in absolute terms they still fell further behind illustrating a further exacerbation in inequality.

The Numbers

The Nuance

In financial markets, we continue to see a bounce back and growth will depend in part on how the recent outbreak of the virus unfolds and how governments respond.

Investor sentiment towards Chinese stocks has been dampened further, with the announcement of a 5-year plan which is set to expand government legislation with the goal of building a more modern regulatory environment. Given the US’s continued concern over technology symbiosis and a further crackdown on aspects such as security and privacy, it is more likely that Chinese overseas investment will take place in other countries such as East Asia, India, or Europe.

The US-China relationship continues to be a complicated one and will be driven increasingly by competition rather than cooperation. Fears of decoupling between the two nations could give the dollar and yen a boost against other currencies. The belt and road initiative continues to contribute to foreign trade and it will be interesting to see whether or not the US decides to cooperate more closely with the project. Looking forwards, key themes remain whether or not monetary policy needs to be tightened in light of high and persistent inflation and how swiftly governments will decide to restore economic freedom.

The Delta variant has the potential to turn a sizzling summer into a dismal autumn. Timing will continue to be everything – how can investors ride the second wave and not drown in it.

Quote of the Week

“Boris Johnson is the wettest man to stand under an umbrella”.,

Boris Johnson left viewers unimpressed after appearing drenched in a TV interview, despite holding an umbrella. The Prime Minister, braved the rain as he visited Surrey Police headquarters in Guildford to launch the governments’ new beating crime plan. Boris was holding an umbrella above his head as he spoke but it appeared to have no effect, with his shoulders and the top of his suit soaked through. His hair also fell victim to the elements, sweeping across his forehead as he spoke.