CBRE has issued its response to today’s Bank of England growth forecast and outlined the likely impact on the UK property sector.
Neil Blake, Head of EMEA and UK Research, CBRE, said: “As expected the Bank of England has heavily revised down its forecasts for UK economic growth and inflation. The forecast of flat GDP in 2012 is consistent with the muted performance of the UK property market. What is interesting from a property context is how London has bucked the trend. Both Central London office and retail rents have shown a healthy increase over the year to date and investors have continued to focus on the London market. Investment flows reflect investors’ perception of London as a safe haven from the Eurozone’s problems but increasing rents reflect improving occupier demand despite the problems in the financial services industry.
“The prospect of lower levels of inflation provides a much needed respite for the UK consumers who have suffered heavily from high inflation and falling real incomes in recent years. Despite the poor GDP performance this may herald an upturn in consumer spending and retail sales which will help to support occupier demand for retail property.”