By boosting real disposable incomes, the energy price cap will give some support to commercial rents, particularly in consumer-facing sectors such as leisure and retail. However, that benefit needs to be set against the risk that interest rates will now be higher due to the fiscal expansion. While we think investors’ expectations for Bank Rate have gone too far, property yields are now likely to be slightly higher over the next couple of years. That will outweigh the boost to rents, and we now expect all-property capital values to fall by over 4% in 2023.
Become a member to read more
This is premium content that requires an active Capital Economics subscription to view.
Already a member?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services