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Oil sees sharpest drop since 2022, signs of price settling

Oil prices have reversed recent gains, with Brent crude recording its largest single-day decline since 2022, down c.5.6% to $67.50, underscoring short-term volatility amid ongoing geopolitical tensions. Despite elevated risk premiums, prices appear to have stabilised for now. The International Energy Agency expects global oil supply to exceed demand in 2025, reinforcing the recent downward trend in prices and supporting a more subdued oil price environment.

And shipping costs remain within normal range, limiting any inflationary fears 

The Baltic Dry Index (BDI), a key gauge of global shipping costs for raw materials, has declined -34% over the past week following a brief spike driven by geopolitical tensions. While recent volatility reflects short-term supply chain disruptions, the index remains well below its pandemic-era highs. Despite the market noise, the underlying fundamentals for UK CRE and broader economic conditions remain stable.

UK Industrial Strategy targets lower energy costs for businesses following rising costs seen since 2021 

As part of its 10-year industrial strategy, the UK government will invest £2bn over four years to reduce electricity costs by up to 25% for more than 7,000 energy-intensive businesses. The new British Industrial Competitiveness Scheme, set to launch in 2027, will target sectors such as automotive, aerospace, and chemicals, primarily through exemptions from green levies. The initiative follows a 46% rise in non-domestic electricity prices between 2021 and 2024 .