Economics data
Ltd
Normally,
employment
numbers
are
a
reasonably
good
proxy
for
office
tenant
demand.
However,
given
the
short-term
disruption
caused
by
the
pandemic,
and
the
furlough
scheme
and
other
supportive
measures,
it
is
likely
that
the
numbers
are
not
truly
reflective
of
the
state
of
the
economy.
We
expect
that
the
number
will
fall
over
the
course
of
2021.
Only
a
few
years
ago,
and
despite
historically
low
rates
of
interest,
inflation
was
exceeding
the
Bank
of
England’s
target
rate.
Now,
with
interest
rates
at
only
0.1%,
the
rate
is less than 1%.
Nevertheless,
there
are
increasing
concerns
that
the
effect
of
the
US
household
stimulus
packages
will
be
to
increase
inflation
in
the
US
and this may spread more globally
Over
the
last
year,
the
UK
has
experienced
the
most
volatility
it
probably
has
ever
faced
-
all
due,
of
course,
to
the
pandemic
and
the
government stimulus.
In
reality,
the
UK
is
in
a
severe
recession,
but
with
the
potential
to
recover
strongly
in
the
second
and
third
quarters
as
the
‘lock
down’
is
relaxed in phases.
Covid
19
has
had
an
adverse
effect
on
tenant
demand
for
commercial
property.
But
the
deterioration
has
been
happening
for
the
last
five
years
(and
even
before
then),
with
the
UK
leading,
most
likely
driven
by
the
retail
sector,
and
it
is
only
with
the
virus
that
there
has
been
(a
remarkable)
convergence.
Despite
this
deterioration,property
values
have
held
up
well,
with
only
some weakness evident in the UK
Property data
