City deal index shows that UK economic recovery may stall
updated on 07 September 2015
The Law Society City Legal Index, which tracks those deals that the top 50 UK law firms have been involved with, has released figures which show that the total number of deals decreased in the first half of 2015.
Traditionally, the index has provided a gauge of the City’s input into the wider economy, and assumes that the number of legal deals is one indicator of the direction of economic growth for the UK. As such, these figures suggest that growth is likely to slow down in the third quarter of 2015, but will pick up again in the final quarter.
Taking a look at specific sectors, there was a sharp fall in the number of energy and utility deals, largely due to the fall in oil prices, and a noticeable decline in technology, media and telecoms deals. However, deals in the finance and banking, real estate and construction, and manufacturing sectors increased in the period under review. There were also some signs that the average value of deals may be on the up.
Law Society President Jonathan Smithers commented: "Legal services are used by all businesses and sectors, so the City Legal Index provides a useful overview of the economy and how different sectors are faring. The fall in the number of legal deals in the first half of 2015 followed by the slight pick-up suggest we may see a short term stalling in the recovery of the UK and international economy. The slowdown in China could well accentuate this trajectory."
