UK house price growth picked up in April, building society Nationwide reports this morning, with the first monthly increase in seven months. Average house prices rose by 0.5% last month, Nationwide’s data shows, following seven consecutive falls going back to last September. The average price increased to £260,441, up from £257,122 in March. This has lifted the annual rate of house price growth to -2.7%, from -3.1% in March, as calm returned to the markets after the chaos of last autumn’s min-budget. Robert Gardner, Nationwide’s chief economist, reports there were “tentative signs of a recovery” in the market last month, although this still leaves prices 4% below their August 2022 peak. Gardner explains: “Recent Bank of England data suggests that housing market activity remained subdued in the opening months of 2023, with the number of mortgages approved for house purchase in February nearly 40% below the level prevailing a year ago, and around a third lower than pre-pandemic levels. "However, in recent months industry data on mortgage applications point to signs of a pickup." Last month, Rightmove reported that asking prices were at record levels. Gardner says the recent pick-up in UK consumer confidence may be helping the housing market, but cautions: "But any upturn is likely to remain fairly pedestrian, as it will take time for household finances to recover, since average earnings have been failing to keep pace with inflation, and by a wide margin over the last few years. "Mortgage interest rates are also likely to act as a headwind. While they are well below the highs seen in the wake of the mini-budget last year, rates are still more than double the level prevailing a year ago." Britain’s biggest supermarkets are facing calls for the UK’s competition watchdog to investigate claims of profiteering amid the cost of living crisis, as food price inflation soared to a record high in April. Overnight, Australia’s central bank has surprised investors by raising interest rates again. The RBA board raised its cash rate 25 basis points to 3.85% at its monthly meeting on Tuesday, defying investors who had bet the central bank would extend its pause for a second month. Higher interest rates lift profits at banks... such as HSBC, which has reported a three-fold jump in earnings in the last quarter, On a constant currency basis, HSBC’s profit before tax increased by $9.0bn to $12.9bn, leading the bank to launch up to $2bn of share buybacks and a 10 cent-per-share dividend. The latest factory PMI reports will show how manufacturers in the UK and the eurozone fared in April. That follows a surprise contraction in China’s factory output, reported on Sunday. We get the latest eurozone inflation report this morning, with prices expected to have risen by 7% in the 12 months to April, up from 6.9%. Core inflation could stick at 5.7%, worryingly high for the European Central Bank.
The agenda • 7am BST: Nationwide house price index for April • 9am BST: Eurozone manufacturing PMI for April • 9.30am BST: UK manufacturing PMI for April • 10am BST: Eurozone core inflation rate on April • 3pm BST: US Factory Orders for March We’ll be tracking all the main events throughout the day ... |