The week ahead 01 September 2025 - Tech firms plan UK expansion
What to watch out for in the UK economy and property market this week.
A survey of 500 UK tech firm CEOs by Barclays published last week revealed 60% believed that Britain was a better place for them to expand than overseas. Those favouring the UK cited the high quality of the workforce, and the rapid adoption of new technology by consumers here. Also, 70% of CEOs said they intend to invest more capital in the next 12 months, while 76% believed their business was benefiting from growth in the wider economy. This is encouraging news from a sector that is important for driving growth in the UK economy. In the year to June 2025, the information and communication sector was the strongest growing of the UK service sector industries, according to ONS.
Last week also saw some good news for the manufacturing sector, with a healthy set of car production figures for July. The motor industry saw a sharp fall in output in the spring, with 59,000 cars made in April and 49,800 in May – down from 79,000 in March. However, this rebounded to 69,000 in June, while July production was similar at 69,100. Compared to a year ago, output for July 2025 was up 5.6%. The automotive industry has this year had to cope with the US tariffs uncertainty, while some UK car plants changed over to new models, which hit production. The data for June and July suggests car makers are now pulling clear of these issues.
Meanwhile in the US, PCE Inflation – the measure of price rises the Federal Reserve uses as its benchmark – remained stable at 2.6% in July, which increased speculation that the Fed may cut interest rates at its next policy meeting on 17th September. Core inflation (which excludes volatile items like food and fuel) did nudge up from 2.8% in June to 2.9% in July, but this was in line with forecasts.
This week sees the release of inflation data for the Eurozone, employment figures for the US and retail sales for the UK.
Euro Area inflation was exactly on target at 2.0% in June, so the ECB will be hoping for no change, which we suspect will be the case. We believe the ECB will probably now hold its policy interest rate steady for some time.
Friday sees the release of US non-farm payrolls data, a set of figures that has become controversial following a large downwards revision for the May and June numbers. This prompted President Trump to dismiss the head of the Bureau of Labor Statistics. Given the US jobs market appears to be weaker than previously thought, but the wider economy has not suffered as badly as some expected as a result of the tariffs controversy, we are forecasting growth in payrolls in August that is in line with that seen in July.
UK retail sales numbers for July are published on Friday. Most evidence indicates consumers are cautious, and building up savings, which normally would point to disappointing retail sales volumes. However, warm weather does often boost the high street, so we are predicting another rise in sales, but at a slower pace of growth than seen in June.
This week's figures
Tuesday 2 September
Euro Area CPI Inflation, y-on-y, August
2.0% previous
2.0% forecast
We believe the sluggish economy probably deterred firms from passing on higher costs to consumers, causing inflation to remain steady at 2.0%.
Friday 5 September
UK Retail Sales, y-on-y, July
1.7% previous
1.4% forecast
July saw warm weather, which probably buoyed sales of food, drink and fashions. However, with inflation cutting into the spending power of households, we are expecting a slower pace of growth for retail sales.
Friday 5 September
US Non-Farm Jobs, August
73k previous
73k forecast
Revisions to the historic data mean the US jobs market has been growing far more slowly than previously thought. However, other economic indicators are holding up well this summer, so we are forecasting a rise in jobs similar in size to July.
