BRITISH BONDS AND REAL ESTATE ARE IN DEMAND 1/3

22 Sep

BRITISH BONDS AND REAL ESTATE ARE IN DEMAND 1/3

After an exceptionally strong start to 2025, the UK economy experienced a notable slowdown in the second quarter. Real gross domestic product (GDP) growth settled at a more modest +0.3% quarter-on-quarter, a significant deceleration from the +0.7% surprise performance recorded in Q1. This performance places the United Kingdom in a mixed position when compared to its G7 peers, with growth that is well above the Eurozone's +0.1% and Germany's contraction of -0.3%, but remains significantly lower than the United States’ +0.8%.

Key Points

  • Growth slows after a robust start to the year
  • The UK economy is running out of steam
  • Leading indicators point to a divided economy
  • The labor market appears to be easing
  • Household confidence is eroding
  • Inflation is not showing sufficient signs of slowing
  • The BoE remains cautious but is reducing its QT program
  • The bond market offers attractive yields
  • Prospects for pound appreciation
  • Securitized real estate remains particularly attractive
  • A cautious approach to UK equities