The week ahead 31 March 2025 - Markets reassured by Spring Statement

What to watch out for in the UK economy and property market this week.
Ten-year gilt yields on Friday afternoon stood at 4.74%, marginally down on the 4.77% seen a week earlier, which suggests the Chancellor of Exchequer’s Spring Statement persuaded investors she is maintaining fiscal discipline. Through a combination of welfare reform and department spending cuts, the Treasury has restored the £9.9 billion of fiscal head-room the government had six months ago. However, the announcement by the White House of further US tariffs started a debate on whether the Chancellor will find herself back to restoring the head room come the autumn budget.
Nevertheless, the Chancellor did manage to get some good news into the Spring Statement. Another £2 billion was found for capital investment, plus £2 billion for affordable housing. Also, while the GDP growth forecast for 2025 was revised downwards, the predictions for subsequent years were increased. Adding some credibility to that optimism was news on Monday that the UK composite PMI, a business activity index, increased this month; while the latest inflation data reported a decline from 3.0% in January to 2.8% February.
Our full analysis of last week’s Spring Statement can be found here.
The latest retail sales figures showed volumes increased by 1.0% month-on-month in February, defying a consensus forecast of a -0.4% contraction. There was a particularly strong performance by household goods stores, which recorded an impressive rise of 6.8%. Non-store retail sales (which are mostly ecommerce) were up by 3.3%. Food stores, however, recorded a -2.0% decline in sales, following strong figures in January. Calling the retail sales figures has been tricky for forecasters lately, as the sector has been experiencing fast changing market conditions, with significant variation occurring between the sub-sectors.
This week sees the release of Nationwide’s UK house price index, which will make for interest reading. In general, house prices have been holding up much better during the economic slowdown than many anticipated. To add to this momentum, April will see a rise in the rate of Stamp Duty Land Tax, and it seems highly likely some buyers will have transacted in March to avoid the increase. This could further buoy house prices, although there probably will be a corresponding lull in sales activity in April because some demand was pulled forwards into March.
Across the Atlantic, the closely watched US non-farm jobs data will be released on Friday. The uncertainty surrounding Trump’s tariff regime is probably making life difficult for US manufacturers, as many source parts and commodities abroad, and therefore the policy makes planning and pricing difficult. Given the erratic situation, we believe firms may have slowed recruitment in March.
This week's figures
TUESDAY 1 APRIL
Nationwide House Price Index, y-on-y, March
3.9% previous
4.0% forecast
We suspect there was a rush to buy in March as buyers moved to transact ahead of the increase in Stamp Duty scheduled for April. Consequently, we are forecasting a small rise in the growth rate.
TUESDAY 1 APRIL
Euro Area Inflation Rate, y-on-y, March
2.3% previous
2.2% forecast
Given we have seen a range of indicators pointing to sluggish growth lately, we believe the rate of inflation in the Eurozone probably edged down in March.
FRIDAY 4 APRIL
US Non-Farm Payrolls, March
151k previous
120k forecast
The uncertainty surrounding the new tariff regime has probably impacted supply chains and complicated planning decisions for US businesses. Consequently, we are predicting a deceleration for recruitment is now underway.
