This page provides commentary and charts on the latest changes in the UK economy, using novel and rapid data sources as well as official statistics.
We explain the reasons behind each change as much as possible, although it can be difficult to separate the impacts of different things such as Brexit and COVID-19.
For an overview of our main economic indicators, visit our dashboard.
Latest headlines20 October 2021
- Increased prices in wood and steel partly because of pandemic impact
- UK average house prices increased by 10.6% over the year to August 2021
- Inflation rate falls to 2.9% in the year to September 2021
This page was last updated on 20 October 2021.
Increased prices in wood and steel partly because of pandemic impact
20 October 2021
Global supply issues and increased demand for construction continue to push up prices in wood and steel, some of which is related to the coronavirus (COVID-19) pandemic.
An increase in DIY and home maintenance during lockdown is partly behind a recent rise in the price of timber. Demand for timber has risen more generally in recent years with a surge in housebuilding in the UK in 2019. Wildfires in supplier countries such as the USA, Russia and Canada have also put pressure on markets.
The price of wood as a material (sawn and planed for the domestic UK market), has increased 42.6% in the period to September 2021.
Products made from wood, cork, straw and other plaiting materials have increased consistently in price since April 2020.
Products made from metal (apart from machinery and equipment) for the UK market have been increasing in price since December 2020.
This is largely because of a record high global price for iron ore, which has in turn pushed up prices for steel and products made from steel. Supply chain issues during the pandemic have also contributed to price increases.
In July 2021, the price of steel per tonne was $214.55, almost double what it was in a similar period in 2020.
Construction output was harder hit in the first few months of the pandemic in the UK (March 2020 to July 2020) than during the 2008 to 2009 recession, but recovery has been quicker. The industry has continued to recover in the second half of 2020 and 2021.
UK average house prices increased by 10.6% over the year to August 2021
20 October 2021
The UK’s average house price increased by 10.6% over the year to August, up from 8.5% in the year to July 2021. The UK average house price for August 2021 was £264,000, which is £25,000 higher than this time last year.
The temporary changes to Stamp Duty, Land and Buildings Transaction Tax, and Land Transaction Tax may have allowed sellers to request higher prices as buyers’ overall costs are reduced. As the tax breaks were originally due to conclude at the end of March 2021, it is likely that March’s average house prices were slightly inflated as buyers rushed to ensure their house purchases were scheduled to complete ahead of this deadline.
This effect was then further exaggerated in June 2021, in line with the extension to the holiday on taxes paid on property purchases in England, Wales and Northern Ireland. Following the decrease in July, average house prices in August 2021 were close to the peak seen in June 2021.
Private rental prices paid by tenants in the UK rose by 1.3% in the 12 months to September 2021, unchanged since July 2021. The beginning of 2021 saw a slowdown in rental price growth, which was driven by prices in London.
London’s rental price growth in September 2021 (negative 0.3%) is lower than any other English region. This reflects a decrease in demand, partly because of the adaptation to remote working, meaning that workers no longer need to be close to their offices. It also reflects an increase in supply, such as an excess supply of rental properties as short-term lets changing to long-term lets.
Inflation rate falls to 2.9% in the year to September 2021
20 October 2021
Consumer prices rose by 2.9% in the 12 months to September 2021, according to the lead measure of the Consumer Prices Index including owner occupiers’ housing costs (CPIH). This is down from 3% in the year to August 2021. Annual inflation rates at this time are influenced by the effects of coronavirus (COVID-19) in 2020. Our recent blog post, Beware Base Effects, describes how price movements for some items during that period influence current inflation rates.
The Consumer Price Index (CPI) also fell from 3.2% to 3.1% in July 2021.
Prices for goods and services from restaurants and hotels contributed to the slightly lower inflation rate, reflecting the end of discounting under the Eat Out to Help Out scheme that took place in August last year. Most other categories made an upward contribution to the change in the annual rate.
Fall in HGV drivers largest among middle-aged workers
19 October 2021
There has been a general decline in the number of heavy goods vehicle (HGV) drivers, officially known as large goods vehicle (LGV) drivers, working in the UK for the past four years. Most of that decline has been in the previous two years, particularly during the coronavirus (COVID-19) pandemic.
An estimated 268,000 people were employed as HGV drivers between July 2020 and June 2021. This is 39,000 fewer than the year ending June 2019 and 53,000 fewer than the peak for HGV driver employment, during the year ending June 2017 (321,000).
There has been a fall in the number of UK nationals employed as HGV drivers since the year ending June 2017. The number of EU nationals employed as HGV drivers increased between 2017 and 2020, but then decreased during the coronavirus pandemic.
The number of HGV drivers has generally declined since July 2016 to June 2017. The largest decline over the four years was among those aged 46 to 55 years.
In the last four years, the age group 46 to 55 years has seen the largest decline in HGV drivers
Number of heavy goods vehicle drivers in employment by age group, January 2016 to July 2021, UK, not seasonally adjusted, thousands
We have used the Annual Population Survey because it is based on a larger sample and has a lower margin of error when analysing occupations data than the Labour Force Survey.
Transactions at Pret A Manger stores across the country have increased compared with April 2021
14 October 2021
In the week ending 7 October 2021, weekly transactions at Pret A Manger stores (referred to here as Pret) in all regions saw an increase when compared with the previous week.
New experimental in-store transaction data from Pret, a sandwich and coffee franchise with around 400 stores, show that in the week ending 7 October 2021, transactions at Pret stores in Manchester increased by 7 percentage points compared with the previous week to 113% of its average weekly level in January 2020. This is the highest level of transactions in Manchester, post-pandemic, since the series began.
Transactions in Pret stores across the country have increased from their total transaction levels in April 2021. The area with the largest relative increase is Yorkshire, which sees a 77-percentage point increase from the week ending 1 April 2021 to the week ending 7 October 2021.
The economy grew by 0.4% in August 2021, as services output grew by 0.3%
13 October 2021
Gross domestic product (GDP) is estimated to have grown by 0.4% in August 2021 and remains 0.8% below its pre-coronavirus (COVID-19) pandemic level (February 2020).
Services output grew by 0.3% in August 2021 and remains 0.6% below its pre-coronavirus pandemic level. This follows a fall of 0.1% in July 2021 (revised down from flat growth).
There was particularly strong growth in accommodation which grew by 22.9%, boosted by hotels and campsites. Arts, entertainment and recreation was the second largest contributor to services growth, growing by 8.5% in August 2021, the first full month of coronavirus restrictions on social distancing being lifted.
Production output increased by 0.8% in August 2021, mainly because of the continued increase in the extraction of crude petroleum and natural gas following the reopening of oil field production sites (previously temporarily closed for planned maintenance).
Construction output fell by 0.2% in August 2021, the second consecutive monthly fall. Construction output had peaked at 0.9% above its pre-pandemic level in April 2021 but, as of August 2021, is now 1.5% below. This reflects recent challenges faced by the industry such as rising input prices and delays to the availability of construction products (notably steel, concrete, timber and glass).