Real Estate Investment Forecasts Q3 2006

Published: November 2006
Source/Company: Colliers CRE

Abstract:
The economy has surprised on the upside over the first three-quarters of the year. Preliminary estimates of GDP indicate that the economy grew 0.7% in the third quarter, the highest rate since 2004 and above the ten year average. The pickup has been largely driven by the business services sector, while the manufacturing sector is finally beginning to benefit from the strength of the global economy. Meanwhile, consumer expenditure shows recent improvement with a strong pick up over the summer months, but it still remains subdued by historical standards. A combination of high inflation and rising economic activity has put significant pressure on the Bank of England to raise interest rates. Rates were raised by 25 basis points in August and the money markets are pricing a further 50 basis point rise by the middle of 2007.