London Daily

Focus on the big picture.
Friday, Nov 28, 2025

Two indicators slowdown already under way after Bank of England warns of 15-month recession

Two indicators slowdown already under way after Bank of England warns of 15-month recession

The bank rate is now at its highest level since 2008 as the Bank of England warns of tough times ahead - but signs of slowdown are already there.

Just a day after the Bank of England warned of a 15-month recession, there are signs in housing and recruitment that the slowdown is already well under way.

Figures out on Friday showed that house prices fell in July (in monthly terms) for the first time in more than a year, with warnings that the market is likely to weaken further following the bank's hiking of interest rates from 1.25% to 1.75%.

The bank rate is now at its highest level since 2008, as the bank tries to fight inflation which is running at 9.4% - well above its 2% target - and is forecast to pass 13% later this year.

It comes as households face record-breaking increases in energy bills, and mortgage lender Halifax said that this rapidly-spiralling cost of living would have its effect on the market, as buyers look to rein in spending.

In July the average house price stood at £293,221 - down £365 or 0.1% from the previous month's record high. In annual terms, however, prices still rose by 11.8%, compared to the 12.5% seen in June.

Russell Galley, Halifax managing director, said: "House prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold.

"Therefore a slowing of annual house price inflation still seems the most likely scenario."

It comes after a report from rival lender Nationwide which showed house prices rose in July, but at the slowest monthly pace seen in a year.


Bank of England data has also shown the lowest number of new mortgage approvals in two years during June.

The gloomy outlook is also resulting in fewer staff being hired by businesses, as they too become more cautious.

A study of 400 recruiters by the Recruitment and Employment Confederation and KPMG showed that businesses - facing increasing costs from energy prices and inflation - are "rightly hesitant" about their hiring plans.

Claire Warnes, of KPMG, said: "The trend of uncertainty in the UK jobs market of the last few months continues, as overall hiring activity saw another slowdown in July.

"Given the challenging economic outlook, employers are rightly hesitant about their hiring plans, but, to compound this, a lack of suitable candidates and an overall skills shortage in most sectors are keeping starting salaries high."


Kate Shoesmith, deputy chief executive of the REC, said: "The jobs market remains solid. Demand for staff continues to rise, as it has done since early 2021, rising in every sector.

"Starting salaries are still growing too, making this a good time for jobseekers to be looking for their next role.

"However, growth in permanent hiring has softened in recent months. We've seen that rising fuel and energy prices, inflation and labour shortages are impacting employer confidence.

"Labour and skills shortages are also restricting opportunities for both the private and public sector to meet consumer demand."


In the past week, the closely-watched PMI surveys have also shown signs of slowdown in the services, manufacturing and construction sectors.

It all presents a massive challenge for the next prime minister, as Conservative Party members prepare to choose between Rishi Sunak and Liz Truss for the role.

In Sky News's Battle for Number 10 Leadership Special on Thursday night, Ms Truss insisted a recession is not inevitable, adding: "We can change the outcome and we can make it more likely that the economy grows".

When her rival Mr Sunak was asked whether there is anything that can be done about a recession, he said: "Of course there is, of course."

He said "gripping inflation" would be the best way of preventing a recession, saying: "So what I'm not going to do is embark on a borrowing spree worth tens of billions of pounds, put that on the country's credit card, ask our kids and our grandkids to pick up the tab, because that's not right. That's not responsible."

Newsletter

Related Articles

0:00
0:00
Close
250 Still Missing in the Massive Fire, 94 Killed. One Day After the Disaster: Survivor Rescued on the 16th Floor
Trump: National Guard Soldier Who Was Shot in Washington Has Died; Second Soldier Fighting for His Life
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
UK Court Hears Challenge to Ban on Palestine Action as Critics Decry Heavy-Handed Measures
Investors Rush Into UK Gilts and Sterling After Budget Eases Fiscal Concerns
UK to Raise Online Betting Taxes by £1.1 Billion Under New Budget — Firms Warn of Fallout
Lamine Yamal? The ‘Heir to Messi’ Lost to Barcelona — and the Kingdom Is in a Frenzy
Warner Music Group Drops Suit Against Suno, Launches Licensed AI-Music Deal
HP to Cut up to 6,000 Jobs Globally as It Ramps Up AI Integration
MediaWorld Sold iPad Air for €15 — Then Asked Customers to Return Them or Pay More
UK Prime Minister Sir Keir Starmer Promises ‘Full-Time’ Education for All Children as School Attendance Slips
UK Extends Sugar Tax to Sweetened Milkshakes and Lattes in 2028 Health Push
UK Government Backs £49 Billion Plan for Heathrow Third Runway and Expansion
UK Gambling Firms Report £1bn Surge in Annual Profits as Pressure Mounts for Higher Betting Taxes
UK Shares Advance Ahead of Budget as Financials and Consumer Staples Lead Gains
Domino’s UK CEO Andrew Rennie Steps Down Amid Strategic Reset
UK Economy Stalls as Reeves Faces First Budget Test
UK Economy’s Weak Start Adds Pressure on Prime Minister Starmer
UK Government Acknowledges Billionaire Exodus Amid Tax Rise Concerns
UK Budget 2025: Markets Brace as Chancellor Faces Fiscal Tightrope
UK Unveils Strategic Plan to Secure Critical Mineral Supply Chains
UK Taskforce Calls for Radical Reset of Nuclear Regulation to Cut Costs and Accelerate Build
UK Government Launches Consultation on Major Overhaul of Settlement Rules
Google Struggles to Meet AI Demand as Infrastructure, Energy and Supply-Chain Gaps Deepen
Car Parts Leader Warns Europe Faces Heavy Job Losses in ‘Darwinian’ Auto Shake-Out
Arsenal Move Six Points Clear After Eze’s Historic Hat-Trick in Derby Rout
Wealthy New Yorkers Weigh Second Homes as the ‘Mamdani Effect’ Ripples Through Luxury Markets
Families Accuse OpenAI of Enabling ‘AI-Driven Delusions’ After Multiple Suicides
UK Unveils Critical-Minerals Strategy to Break China Supply-Chain Grip
Taylor Swift’s “The Fate of Ophelia” Extends U.K. No. 1 Run to Five Weeks
UK VPN Sign-Ups Surge by Over 1,400 % as Age-Verification Law Takes Effect
Former MEP Nathan Gill Jailed for Over Ten Years After Taking Pro-Russia Bribes
Majority of UK Entrepreneurs Regard Government as ‘Anti-Business’, Survey Shows
UK’s Starmer and US President Trump Align as Geneva Talks Probe Ukraine Peace Plan
UK Prime Minister Signals Former Prince Andrew Should Testify to US Epstein Inquiry
Royal Navy Deploys HMS Severn to Shadow Russian Corvette and Tanker Off UK Coast
China’s Wedding Boom: Nightclubs, Mountains and a Demographic Reset
Fugees Founding Member Pras Michel Sentenced to 14 Years in High-Profile US Foreign Influence Case
WhatsApp’s Unexpected Rise Reshapes American Messaging Habits
United States: Judge Dressed Up as Elvis During Hearings – and Was Forced to Resign
Johnson Blasts ‘Incoherent’ Covid Inquiry Findings Amid Report’s Harsh Critique of His Government
Lord Rothermere Secures £500 Million Deal to Acquire Telegraph Titles
Maduro Tightens Security Measures as U.S. Strike Threat Intensifies
U.S. Envoys Deliver Ultimatum to Ukraine: Sign Peace Deal by Thursday or Risk Losing American Support
×