The week ahead 06 October 2025 - Housing market maintains growth trajectory
What to watch out for in the UK economy and property market this week.
The UK economic news has made for downbeat reading lately, although last week saw some positivity thanks to the latest data on the housing market. The Nationwide House Price Index increased by 2.2% in September compared to a year ago, up from 2.1% in August and ahead of the consensus forecast figure of 1.8%. The month-on-month growth rate was 0.5% in September, compared to a -0.1% contraction in August. Separately, the Bank of England reported mortgage approvals in August stood at 64,700, down from 65,200 in July but slightly better than the consensus forecast of 64,500.
However, on the commercial side of the economy there was disappointing news, as the UK PMI index (a survey of business activity) saw its September figure revised downwards – from 51.0 in the first reading to 50.1 in the final release. The convention of the index is that a reading above 50 points to an expanding economy, so in September growth was marginal. The survey shows firms are on balance getting less new work, and are reluctant to hire new staff. We suspect conditions will remain subdued until businesses hear what is in the Chancellor’s autumn budget, which is scheduled for 26th November.
In the US, the closely watched non-farm jobs data was not released last Friday due to the Federal government shutdown. However, before being shuttered, the US Labor Bureau did release figures on job vacancies – which was little changed at 7.2 million in August. There was also a slight decline in the number of people quitting their jobs, down from 3.2 million in July to 3.1 million in August. Meanwhile, jobs data from ADP (a HR and payroll services firm) showed private companies had cut their headcount in September by 32,000 posts, versus a reduction of 3,000 in August. Overall, the numbers released last week point to sluggish conditions in the US jobs market.
This week sees the release of data on US trade.
Over the next year, economists and politicians will be closely watching the American trade figures and debating whether Trump’s tariff policy has had a positive or negative impact. We suspect the August numbers are unlikely to shed much light on the debate, as we are still only a few months into the new tariff regime. However, it is apparent the whole affair has caused disruption, and probably persuaded some foreign corporations to shy away from buying American goods, at least in the short-term. The big question is: now trade deals have been brokered, will US firms see foreigner customers return?
This week's figures
Monday 6 October
Euro Area Retail Sales, y-on-y, August
2.2% previous
2.1% forecast
Thanks to the reduction seen in interest rates in the last year, we believe retail sales will be higher in comparison to a year ago, although we suspect there will be significant variation in the data at a country level.
Tuesday 7 October
US Trade Balance, August
-$78.3 bn previous
-$66.0 bn forecast
The July figures saw imports grow at a faster pace than exports, so the Trump White House will be hoping the conclusion of recent trade deals will have spurred exports in August.
