Everything Is Just A Mess!                                                                    24 November 2023

The week’s 2,421 real estate and properties transactions totalled US$ 2.45 billion, during the week ending 24 November 2023. The sum of transactions was 384 plots, sold for US$ 692 million, and 1,468 apartments and villas, selling for US$ 921 million. The top three transactions were all for plots of land, the first in Business Bay for US$ 38 million, the second in Wadi Al Safa 5 for US$ 24 million and Warsan Fourth for US$ 15 million. Wadi Al Safa 2 recorded the most transactions, with one hundred and thirty sales, worth US$ 19 million, followed by forty-three sales, in Saih Shuaib 1 for US$ 21 million, and forty sales in Palm Jabal Ali, valued at US$ 267 million. The top three transfers for apartments and villas were for a villa in Palm Jumeirah for US$ 11 million, an apartment in Palm Jumeirah, sold for US$ 9 million, and an apartment in Al Merkadh for US$ 9 million. The mortgaged properties for the week reached US$ 809 million; one hundred and thirty-nine properties were granted between first-degree relatives worth US$ 138 million.

Jumeirah Golf Estates, rated among the top ten lifestyle estates in the world, is home to a recent US$ 82 million sale of a plot of land. This latest transaction is a reflection of the growing demand for upmarket golf course communities, within both the local and global realty sectors. JGE boasts two golf courses, (including the Earth course which last week hosted the final tournament of the acclaimed DP World Tour Championship, and has over 1.5k villas, townhouses and apartments). Dubai ranked first in Knight Frank’s list of the world’s top luxury real estate markets in 2023, accounting for 17% of the segment’s total sales globally.

Following in the footsteps of the D penthouse in One Hyde Park, London, at US$ 237 million and the Odeon Tower penthouse in Monaco, at US$ 440 million, the two most expensive in the world, the Palm Jumeirah Como Residences penthouse apartment from Nakheel at US$ 136 million, becomes the most expensive penthouse ever built and sold in Dubai – and the third in the world. This transaction has surpassed the recent two Dubai deals – US$ 114 million for an apartment in Marsa Al Arab and US$ 112 million for one in Bulgari Light House. The Como Residences penthouse will encompass 21.9k sq ft and compromise a 5 B/R luxury apartment, including among its countless amenities, exclusive access via a private elevator, and has a state-of-the-art home automation system.

According to a report from Prime by Betterhomes, October transactions witnessed the highest number of secondary luxury transactions recorded so far in 2023, with secondary sales more than trebling on the month from sixty-seven to two hundred and seventy-seven; off-plan sales fell from eighty-four in January to October’s figure of twenty-two. Value-wise, Oqood transactions stood at US$ 280 million, while secondary transactions stood at US$ 1.84 billion. Dubai’s climb to its leading position, in the global luxury real estate market, has been abetted by several factors including visa reforms, entrepreneurial incentives, its speedy response post pandemic, cultural advancements and progressive government reforms. In October, the leading three locations in the luxury property sector were Palm Jumeirah, MBR City and Palm Jebel Ali; the flip side saw Bluewaters Island, Business Bay, and Damac Hills posting a dip in transaction activity. H & H, Omniyat, and Majid Al Futtaim retained their positions as top luxury developers this year, with notable projects such as Baccarat Downtown, Orla Infinity, and Lanai Island & Serenity. Notably, the branded residential market had an 80%, year on year surge in sales, with over 2k units launched in 2023, as average prices climbed by 33% to US$ 1.14k per sq ft for branded residences since December 2022.

It took only four hours for Wasl to sell out the first phase of its new Hillside Residences project; subsequently, the developer launched the second phase of the project on the same day. Hillside Residences features a collection of eight hundred and nineteen units, ranging from 1 B/R to 4 B/R, including two-bedroom duplexes, three-bedroom duplexes, penthouses, and four-bedroom duplex penthouses. The large real estate management and development company has located the development within the Wasl Gate master development, located in Jebel Ali.

In the aftermath of last week’s Dubai Air Show 2023, it has been reported that it had been its largest ever edition. During the five-day event, there were more than US 101 billion in deals and a 30% hike in footfall to 135k attendees, that reinforced Dubai’s global position as a crucial hub for the aerospace and defence sectors. The next edition will take place in November 2025 at Dubai World Central Al Maktoum airport.

In the first nine-month period, Dubai Customs has seen a 13% jump in transactions to 21.6 million. Latest figures seem to indicate that the targets set out in Dubai’s economic agenda D33, which seeks to double foreign trade and establish new trade routes, connecting Dubai with four hundred additional cities worldwide, are online. Customs declarations constituted 87% of the total customs transactions. By the end of Q3 2023, Dubai Customs had processed approximately 18.8 million customs declarations, 13.2% higher on the year. The main goal for Dubai Customs is to position Dubai as one of the top four global financial hubs, fostering economic productivity through innovation and digital integration.

The number of business licences, linked to creative activities registered in the country, reached 932k by the end of H1, with the government’s strategy to attract more businesses and boost the economy.  At the fifth meeting of the economic integration committee, chaired by Abdulla bin Touq, the Minister of Economy noted that the country had established itself as a leading global financial hub “that offers all enablers for success for the business sector, investors, and start-ups from around the world.” In recent times, the government has introduced 100% foreign ownership of companies, along with reducing visa restrictions, providing various incentives for SMEs and introducing laws to improve transparency for investors. It also aims to attract US$ 150 billion in FDI by 2030, and eventually reach US$ 272 trillion, (AED 1 trillion) by 2051.

Dubai Chamber of Commerce has achieved a 42.9% growth in memberships to 48.6k in the nine months to 30 September 2023. This reflects the continuing enhancement of Dubai’s reputation on the global state and the growing attraction of Dubai as a business hub. Over the period, the total value of exports and re-exports of member companies topped US$ 57.22 billion, with 544.8k certificates of origin issued. On top of that, 3.2k ATA Carnets were issued and received for goods and commodities, with a combined value of US$ 899 million, during the nine-month period, compared to 2.9k ATA Carnets, with a value of around US$ 409 million during the same period in 2022. Abdul Aziz Abdulla Al Ghurair, chairman of Dubai Chambers, commented that “we will continue to work in tandem with the government as we advance on our journey towards the objectives of the Dubai Economic Agenda (D33).” The Chamber also acts as a conduit between the business community and the government, with the forty-six country-specific business councils and one hundred and five sector-specific business groups that currently operate under the chamber’s umbrella.

Alvarez & Marsal has estimated that the Q3 aggregate net profit of the country’s ten leading banks increased by 5.6% to US$ 5.50 billion, driven by lower impairment charges and a steady increase in net interest income. Q3 total net interest income grew 5.5%, on the quarter, as total interest income for the period rose 11.4%. Other factors to consider include high oil prices, foreign capital inflows, higher interest rates and moderate credit, demand amid rising interest rates. More of the same is expected in Q4. Aggregate deposits grew rose 3.9%, at a faster rate than the 2.4% loan growth, with the loan-to-deposit ratio dipping 1.1% to 75.2%. The ten banks covered in the survey include First Abu Dhabi Bank, Emirates NBD, Abu Dhabi Commercial Bank, Dubai Islamic Bank, Mashreq Bank, Abu Dhabi Islamic Bank, Commercial Bank of Dubai, National Bank of Fujairah, National Bank of Ras Al Khaimah and Sharjah Islamic Bank.

The Central Bank of the UAE has approved Al Ansari Digital Pay’s application for a store value facilities and retail payment service provider license. By Q2 2024, the subsidiary of Al Ansari Financial Services hopes to have introduced a digital wallet that stores users’ credit/debit card information that links it to a payment gateway to allow purchases at a point of sale; it can be used to receive their salaries, remit money domestically and abroad, settle bills, and access digitally enabled services by using a personal QR code, a dedicated app or their phone number. Rashed Al Ansari, group chief executive, noted that with “a consumer base exceeding four million customers, we are confident that this initiative will significantly benefit a large segment of consumers across the UAE.” A report by UK-based price comparison website Money.co.uk indicates that the UAE is the eighth most cashless society in the world.

After eighteen months as chief executive of Shuaa Capital, Fawad Khan has stepped down from the position, citing “personal reasons”, and “will serve his notice period of three months with Shuaa, providing support and ensuring smooth continuity of business activities”. He had been with the firm for six years and took over the top position replacing Jassim Alseddiqi who then moved “upstairs” to take a board position and become MD. In August, Alseddiqi, still one of the bank’s top shareholders, repositioned his stake in the Shuaa, as he noted that significant change was taking place that will make way for new shareholders in the company that manages US$ 5 billion in assets. The Dubai-based investment bank has appointed Wafik Ben Mansour, as acting chief executive, “to lead the next phase of Shuaa capital’s optimisation process to create a growth platform and capitalise on market opportunities in the UAE and wider region.” Formerly a managing director at Credit Suisse for fifteen years, Mr Ben Mansour joined Shuaa in May this year to lead the company’s advisory and capital markets platform. Since reaching its height of managing some US$ 13 million assets under management, it has gone through a business transformation over the past few years, with the outgoing chief executive reportedly indicating that Shuaa aims to double its AUMs to US$ 10 billion in the next five years as well as evaluating several investment deals across the broader GCC.

The Investment Corporation of Dubai posted a record 91% hike in H1 net profit to US$ 7.71 billion, with banking/financial services and transportation’s contributions soaring by US$ 2.23 billion and US$ 2.10 billion. Although real estate and hospitality activities also moved higher, lower commodity prices reduced profitability in oil/gas and aluminium production. Net profit, attributable to the equity holder, came in at US$ 6.16 billion, as assets and liabilities both moving north – by 6.5% to US$ 341.14 billion, (mainly down to the growth of banking assets), and to US$ 265.53 billion, (attributable to higher banking customer deposit). The Group’s share of equity was 4.2% higher to a new record of US$ 61.50 billion. Its MD, Mohammed Ibrahim Al Shaibani, commented that “the Group clearly benefited from the strong economic momentum the emirate is experiencing thanks to the vision and anticipation from the leadership. Looking forward, the proven agility of our businesses and strength of the Group’s financial position will help weather the uncertain global economic outlook. We remain confident in the Group’s ability to identify new investment opportunities and expand its commercial activities.” ICD, established in 2006, is the principal investment arm of the Government of Dubai, and manages a broad portfolio of assets, both locally and internationally, across a wide spectrum of sectors that support Dubai’s dynamic economy.

At next week’s COP28, the Dubai Financial Market will debut a pilot programme for trading carbon credits, which will enhance the bourse’s position as a major player in the sector; it could become a leading regulated platform to assist UAE’s aim to become net zero by 2050, with project capital raising and carbon credit trading. It will assist companies manage unavoidable and residual carbon emissions by providing an integrated platform to explore the trading and use of carbon credits, with each one offsetting one ton of CO2 equivalent emissions.

The Dubai Financial Market, Nasdaq Dubai and Shanghai Stock Exchange have signed a Memorandum of Understanding to strengthen ties between the capital markets of Dubai and China. Some of the benefits, emanating from this agreement, include the exchange of knowledge, expertise, and information as well as to enhancing efficiency and transparency in both markets. Both bourses will jointly explore to develop products, introduce companies and issuers to the advantages of each market and provide them with access to growth opportunities and services.

Last week, the Dubai Taxi Company announced details of its IPO – this week, it issued an announcement relating to the price range for the sale of its shares, at between US$ 0.495, (AED 1.80) and US$ 0.504, (AED1.85) per share, implying a market capitalisation of up to US$ 1.25 billion, (AED 4.6 billion). 624.75 million shares will be offered, equivalent to 24.99% of DTC’s total issued share capital. The IPO subscription period starts on Tuesday and is expected to close on 28 November for UAE Retail Investors and on 29 November for Qualified Investors, with the final offer price being determined through a book-building process. Trading is expected to start on the DFM on 07 December.

The DFM opened on Monday, 20 November 2023, 383 points (10.6%) higher the previous fortnight, dipped 3 points (0.1%) to close the trading week on 3,992, by Friday 24 November 2023. Emaar Properties, US$ 0.21 higher the previous three weeks, was flat, closing on US$ 1.93 by the end of the week. DEWA, Emirates NBD, DIB and DFM started the previous week on US$ 0.68, US$ 4.93, US$ 1.49, and US$ 0.39 and closed on US$ 0.69, US$ 4.92, US$ 1.51 and US$ 0.39. On 24 November, trading was at 49 million shares, with a value of US$ 27 million, compared to 72 million shares, with a value of US$ 96 million, on 17 November 2023.

By Friday, 17 November 2023, Brent, US$ 11.64 lower (12.5%) the previous four weeks, shed US$ 0.74 (1.1%) to close on US$ 80.44. Gold, US$ 40 (2.1%) higher the previous week, gained US$ 17 (1.1%) to trade at US$ 2,004 by 24 November 2023.

Citing that it had lost confidence in his ability to lead OpenAI, last Saturday, the board ousted Sam Altman as its head. It noted that he had not been “consistently candid with his communications, hindering its ability to exercise its responsibilities”, and commented that it was grateful for Mr Altman’s contributions but that members believed new leadership was necessary. Mr Altman had not only been the face of the firm’s rise but was seen by many as the face of the industry more widely. The former executive did indicate that he will have “more to say about what’s next later”, and that there will be great interest in what direction he takes in the future. Hours after his dismissal, Open AI co-founder and president Greg Boardman, posted that “I’m super proud of what we’ve all built together since starting in my apartment eight years ago”. Just weeks ago, OpenAI was reportedly in talks to sell shares in the company to investors at a price that would value it at more than US$ 80 billion. OpenAI named ex-Twitch boss Emmett Shear as interim CEO. By Monday, Microsoft Chief Executive Satya Nadella said in posts on X that Altman would become CEO of a new research group inside the software maker, along with other departing OpenAI colleagues, such as outgoing President Greg Brockman who quit following Altman’s ouster. All changed by Wednesday after AI announced that it had reached an agreement for Sam Altman to return as CEO four days after his ouster. With his return, AI agreed in principle to partly reconstitute the board of directors that had dismissed him, and that former Salesforce co-CEO Bret Taylor and former US Treasury Secretary Larry Summers would join Quora CEO and current director Adam D’Angelo.

Changpeng Zhao has resigned as the chief executive of Binance after pleading guilty to money laundering violations, with the US Justice Department confirming that the world’s largest crypto exchange would have to pay US$ 4.3 billion in penalties and forfeitures. The firm, registered in the Cayman Islands, was accused of enabling “nearly $900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk”, and had helped users bypass sanctions across the world. Indeed, the exchange had facilitated the movement of funds for criminals and terrorists, including direct transfers of approximately US$ 106 million in bitcoin to Binance.com wallets from Hydra, a popular Russian darknet marketplace, and nearly US$ 900 million in transactions between US and Iranian users, and facilitated millions of dollars in transactions between US users and users in Syria, and in the Russian occupied Ukrainian regions of Crimea, Donetsk and Luhansk. Zhao’s guilty plea follows the conviction of Sam Bankman Fried, the CEO of FTX, another massive cryptocurrency exchange, in a high-profile trial last month. Many would question how Binance is still in existence and why nobody has been incarcerated.

Following the recent US-Sino meeting, between Joe Biden and Xi Jinping, computer chipmaker Broadcom has completed its US$ 69.0 billion acquisition of cloud computing firm VMware; this followed close scrutiny be several global regulators before China finally rubber-stamped the agreement. Both companies, based in California, have had to clear the deal with legislators in Australia, Brazil, Canada, China, the European Union, Israel, Japan, South Africa, South Korea, Taiwan, and the UK. Broadcom designs, develops and supplies semiconductor chips, while it also offers infrastructure software solutions, with VMware developing virtualisation software which allows a user to run a virtual computer on a physical computer to increase the efficiency of the computer system. What could become “the world’s leading infrastructure technology company” hopes to create private and hybrid cloud environments where users can run “apps anywhere”.

Following allegations of sex trafficking, Abercrombie & Fitch has confirmed that it has stopped additional retirement income, estimated at around an annual US$ 1.0 million, to its former boss Mike Jeffries. A BBC Panorama investigation found a highly organised network used a middleman to recruit men for events around the world with Mike Jeffries and his British partner Matthew Smith. Court papers allege that it is likely more than one hundred men were sexually abused by Mr Jeffries while he was chief executive and that young men were manipulated “under the guise of providing them with the modelling opportunity of their dreams – becoming an Abercrombie model”. A&F has been accused in a civil lawsuit of funding a “criminal enterprise” led by the two men between 1992 and 2014, and that corporate money and resources were used to “facilitate” a “sex-trafficking venture”.

Judges at the UK Supreme Court have unanimously dismissed an appeal, with the decision that Deliveroo riders did not have an “employment relationship” with the food courier company and were not entitled to compulsory collective bargaining. There has been a long-running dispute, which began when a union tried to represent a group of riders over pay and conditions. The Independent Workers Union of Great Britain which brought the case, said the ruling was a disappointment. The case follows a number of claims brought by workers in the so-called “gig” economy in recent years, demanding rights such as holiday pay, the minimum wage and pensions contributions. The end result is that riders, hired by Deliveroo, cannot be represented by a trade union for the purposes of collective bargaining,

Nissan has announced that its new electric Qashqai and Juke models will be made at its Sunderland site and its commitment to make future electric versions of its two best selling cars – the new electric Qashqai and Juke models – which will help preserve 6k jobs. The investment is thought to be in the region of US$ 1.25 billion and will be supported by a government contribution from the Automotive Transformation Fund. Its location is close to the China-owned AESC battery plant, with Nissan being its only customer; this plant was expanded last year, with help from a US$ 125 million investment from the ATF and Sunderland Council. Post-Brexit trading rules, due to take effect in January next year, will trigger a 10% tariff on cars sold between the UK and the EU unless carmakers have sourced 45% of their components by value from the UK or EU. The battery plant next to Nissan’s Sunderland factory is the only one currently producing batteries for electric cars in the UK but Tata, the owner of Jaguar Land Rover, plans to build a US$ 5.0 billion factory in Somerset, with production due to start in 2026. (However, this week saw the OBR slash its forecast for the number of electric cars to be sold in the UK in 2027 from 67% to 38% of total sales).

This week, Carnival UK has been accused of planning to make over nine hundred staff redundant if they were unwilling to accept new terms and conditions. The owner of P&O Cruises and Cunard has reportedly notified authorities of the “fire and rehire” plan one day after beginning talks with union members. (This comes a year after a separate company, P&O Ferries, owned by DP World, became involved in a similar dispute with the Nautilus union, after sacking eight hundred of its workers, replacing them with foreign agency workers).It seems that the company has notified authorities that it wishes to change employment terms and conditions for crew across ten vessels, including P&O Cruises’ ships, as well as those working on ships such at the Queen Elizabeth and the Queen Mary 2. Unbeknown to the union, the company had submitted Form HR1, a document outlining its redundancy plans to the UK government, with it only finding out details on 22 November, even though negotiations had started eight days earlier. Nautilus has requested the company to withdraw the threat of “fire and rehire”, and engage in meaningful negotiations, and has complained that Carnival UK effectively “wants to enforce a cut in 20% of their working days”, which amounts to a drop from two hundred and forty-three days worked per year, to two hundred days, leading to a drop in income. Late today, following urgent discussions, Carnival UK withdrew the threat to use this controversial strategy known as “fire-and-rehire” in negotiations over the pay and conditions and that they would work “co-operatively towards a negotiated settlement”.

Carnival can only be thankful that Grant Shapps, appointed Secretary of State for Defence in August, is no longer the UK Transport Secretary. In the past four years, and before being appointed  he had been Home Secretary, Business Secretary, and Energy Security Secretary, when he ran the Transport ministry, he was also highly critical of P&O’s management and modus operandi but when he tried to force legislation through, aimed almost entirely at P&O, it was rejected by the industry, with even the man himself belatedly commenting that his original plan to legislate for shipping companies to pay the minimum wage was not feasible.

After a tumultuous three-year reign as chief executive of the Australian telecom giant Optus, Kelly Bayer Rosmarin has resigned with the telecom’s latest network outage last week the ‘straw that broke the camel’s back’; this resulted in 40%, (around ten million), of Australians without direct links for over twelve hours. Ms Bayer Rosmarin had faced criticism over her response to the incident, including at a Senate hearing on Friday, where the Minister for Cyber Security said the firm had “effectively left the window open” for data to be stolen. This follows a major data breach in September 2022, with the company fighting a class action lawsuit from more than 100k current and former customers over the data breach. She will be replaced by chief financial officer Michael Venter while the Singaporean firm searches for a replacement.

Seek’s latest report points to a possible dramatic fall in Australian employment growth going into 2024, as job ads dipped 5% last month and are 19.9% lower on the year. The biggest falls were noted in Victoria, (down by 26.5%), NSW, (24.6%), and the ACT (21.1%), as the hospitality sector was conspicuous by reporting the largest falls, followed by design/architecture and retail. This was despite the fact that the upcoming peak summer is fast approaching – normally the best time for the hospitality sector. The agency noted that “perhaps employers have begun winding up their hiring activity early for the year,” but that “despite the proximity to the busy summer season, hospitality and tourism recorded the greatest drop in ad volume, likely due to inflation and the rising cost of living putting continued pressure on businesses.” Other than hospitality, the biggest job ad declines in October were in design and architecture (8.1%), retail (7.7%), call centres and customer service (6.6%), advertising, arts and the media (6.4%), and banking and financial services (6.3%). A further sign of possible job weakness was that applications per job rose again in September by 4.1% and were 81.1% higher than a year earlier, as more people chase fewer job vacancies.

Data from the Australian Retailers Association, in partnership with Roy Morgan, shows that Black Friday and Cyber Monday sales are expected to account for more than 25% of all holiday purchases this year; for many discretionary retailers, up to two-thirds of their profit is made during the peak Christmas trading period. It forecasts shoppers will spend US$ 4.19 billion across the four-day Black Friday/Cyber Monday weekend (24-27 November) – 3.0% higher on the year. Although the retail event is colloquially dubbed ‘Black Friday’ (and falls on 24 November this year), most stores have been starting their sales much earlier recently — sometimes as early as July. The ARA notes that although Black Friday will provide a boost for the retail sector, overall Christmas trading will be subdued. The survey also notes that for many discretionary retailers, up to two-thirds of their profit is made during the peak Christmas trading period, but top lines could be impacted by consumer spend weakening and under pressure because of the high cost of living; consumer sentiment dipped 2.6 points to 79.9 points. It also noted that in 2022, Australians spent US$ 461 per person on Christmas gifting – this year, it is estimated that this will be lower at US$ 427.

Recent times have seen Spanish tax authorities clamping down on famous names around the interpretation of non-dom status. Four years after her ex-partner, Barcelona footballer Gerard Piqué, was fined US$ 2.3 million by the Spanish national court for evading tax between 2008 and 2010, Colombian pop star Shakira has reached a deal with Spanish prosecutors to settle a tax fraud case. The singer settled out of court, (hours before the case was to start), paying a US$ 8.2 million fine – prosecutors had wanted to jail her for eight years and fine her US$ 26.1 million, if found guilty. The case centred around where Shakira was living between 2012 and 2014, with Shakira disagreeing with authorities who alleged that she was living in Spain – under it laws, people who spend more than six months in the country are considered residents for tax purposes. Prosecutors issued a document which claimed that she bought a house in Barcelona in 2012, which became a family home for her and her then-partner, Gerard Piqué. Her lawyers have said that up until 2014 most of her income came from international tours and she spent long chunks of time outside of Spain. Shakira declared Spain to be her place of residence for tax purposes in 2015 and claimed that she had paid US$ 18.8 million in tax and had no outstanding debts.

Another week and another 5% hike by Turkey’s central bank, lifting its main interest rate to 40%, as part of a concerted campaign to tackle soaring inflation which reached 61.3% last month. Although inflation is expected to rise even further, to a possible 75% over the next six months, some analysts have opined rates were approaching the level required to start lowering inflation. Up to his re-election last May, President Recep Tayyip Erdogan had flown in the face of traditional economic theory by lowering interest rates, (as most of the world pushed interest rates higher), arguing that higher rates would cause prices to rise. However, since then he has changed tack, allowing the central bank to push rates higher – under the tutelage of its new governor, Hafize Gaye Erkan, appointed last June, rates have risen from 8.5% to its current 40% level. She commented that “the pace of monetary tightening will slow down, and the tightening cycle will be completed in a short period of time,” and that interest rates would stay at a high level for “as long as needed to ensure sustained price stability”.

Despite the Chancellor, Jeremy Hunt, cutting tax for both business and individuals, his Autumn Statement still sees the overall the burden remaining at its highest since 1948, mainly because tax thresholds are still frozen until 2028; this is because any pay rise will usually result in increased tax, (by dragging people into a higher tax bracket), which puts more into the public coffers. Surprisingly, the Office for Budget Responsibility confirmed that by 2028, a truly astonishing US$ 57.51 billion will be raised by the freezes in just one year! The Chancellor was able to “play” with a “windfall” US$ 33.76 billion improvement in the public finances because of higher tax receipts, most of which was expended on a bigger-than-expected US$ 11.25 billion National Insurance cut and an US$ 13.75 billion tax cut for business investment.

More importantly, the ONS has upgraded its 2024 inflation forecast which has more than trebled from its earlier 0.9% to 2.8%, whilst the UK economy will grow much more slowly than expected in the next two years, with living standards also not expected to return to pre-pandemic levels until 2027-28. This time last year, the BoE and the ONS were two of many institutions pointing to a 2023 UK recession, so an actual 0.6% growth this year is praiseworthy. However, the watchdog has already slashed its two-year forecast by 1.1% for each year to 1.8% and 2.5%. It also noted that UK living standards, as measured by households’ real disposable income, were expected to be 3.5% lower in 2024-25 than their pre-pandemic level, before returning to normal several years later – this decline is the largest reduction in real living standards since records started in the 1950s. When it comes to the UK economy, it seems that Everything Is Just A Mess!