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UK house prices grow at fastest rate in two years

Zubair — Tue, 03 Dec 2024 23:48:02 +0000

House prices are now growing far higher than expected and at the fastest annual rate in nearly two years, the UK’s largest building society has said.
In the year up to November, houses became 3.7% more valuable, according to Nationwide. Not since November 2022 have prices been rising as fast.
Prices are now just 1% below the all-time highs recorded in the summer of 2022. During that time lockdown savings were being spent as COVID-19 restrictions were unwinding and borrowing rates had not reached recent highs.
The high increases reported on Monday are significantly above economist forecasts. A rise of just 2.4% had been expected by economists polled by the Reuters news agency.
When looked at on a monthly basis there was the biggest increase since March 2022 as prices are up 1.2% compared to October this year.
Even Nationwide has described the price growth as “surprising” as it said homes are unaffordable for many by historic standards.
Having a mortgage is far more expensive now than many of the last few years as interest rates stand at 4.75%.
When compared to average incomes house prices are also still relatively high.
The average property now costs £268,144.
Yet mortgage approvals are now approaching levels seen before the pandemic when interest rates were around 1% or 2%.
The increase has been attributed to economic conditions, namely low unemployment, above-inflation wage rises and low household debt.
If these conditions remain, as expected, then house prices will continue to rise.
But on Friday the Bank of England warned around half the UK’s mortgage holders face paying higher rates over the next three years.

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Interest rates could fall more quickly, hints Bank

Zubair — Wed, 09 Oct 2024 11:42:51 +0000

The Bank of England could cut interest rates more quickly if price rises remain under control, its governor has suggested.
Andrew Bailey told the Guardian, external that the Bank could be a “bit more aggressive” at cutting borrowing costs, depending on the rate of inflation.
The Bank cut interest rates from 5.25% to 5% in August, which was the first drop in more than four years.
Mr Bailey also said that the Bank was watching developments in the Middle East “extremely closely”, in particular any movement in oil prices that could fuel inflation.
The Bank of England has two more more meetings left this year to decide on interest rates, in November and December.
At the Bank’s last gathering in September, Mr Bailey was optimistic that borrowing costs would continue to fall. But he said at the time it was “vital” inflation remained low.
The Bank raised interest rates steadily from the end of 2021 as inflation – the rate at which prices rise – surged, partly due to the increase in energy prices following Russia’s invasion of Ukraine.
However, now that inflation is currently close to the Bank’s 2% target, attention has focused on how many rate cuts will be made.
Falling interest rates will cut mortgage payments for households who have deals that track the Bank of England rate. However, the majority of mortgage customers have fixed-rate deals, so will not be affected immediately.
For savers, a cut in rates is likely to reduce the amount they earn on their money.
Many analysts expect the Bank to reduce rates at its meeting in November. However, following Mr Bailey’s interview with the Guardian, expectations increased of a rate cut in December as well.

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TGI Fridays: 4,500 jobs at risk as restaurant chain owners enter administration

Zubair — Wed, 25 Sep 2024 23:15:09 +0000

The owner of the UK arm of the restaurant chain TGI Fridays (TGIF) has gone into administration, putting 4,500 jobs and 87 outlets at risk.
Hostmore, which runs the UK franchise for TGIF, has appointed administrators and delisted its ordinary shares after struggling to find a “lasting solution” to save the business amid heavy losses and mounting debts, it said on Wednesday.
The hospitality company has already tried to balance its books by deep cost-cutting, pausing its expansion programme, management changes, and selling outlets.
It has put 87 of the chain’s restaurants on the market and hopes to complete a sale by the end of September, which would keep the brand name alive on British high streets and help to secure jobs.
In the meantime, the American-inspired chain “continues to operate normally and all existing stores remain open”, Hostmore said.
The firm’s shares crashed more than 90% last week after it said it expected to be “wound up” and de-listed once the sale of its retail outlets was complete.

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Economy needs `£1trn investment over 10 years to achieve 3% growth rate’

Zubair — Thu, 12 Sep 2024 00:39:23 +0000

The UK economy would need investment of £1trn over a decade for an annual growth rate of 3% to be achieved, according to a business lobby group.
The Capital Markets Industry Taskforce (CMIT), which represents leaders in the financial services sphere, said £100bn a year must be found to help the country catch up after trailing its peers for many years.
It urged a focus on energy, housing and venture capital, arguing the money could be unlocked from the £6trn in long-term capital within the pensions and insurance sector.
The government has made growing the economy its top priority.
Prime Minister Sir Keir Starmer let it be known during the election campaign that he was seeking to achieve a growth rate of 2.5% – a level the economy has struggled to reach since the financial crisis of 2008.
Labour has since claimed its task has been made harder by a £22bn “black hole” in the public finances left behind by the Conservatives, forcing it to make “tough choices” ahead in the looming budget next month, expected to target those with the broadest shoulders, including wealth creators.
The report suggested that UK pensions could double their allocations to domestic and unlisted equities and still be in line with the pensions industry in other advanced markets.
It added that the government, which is reviewing the pension system’s ability to help fund corporate start-ups, should also look at incentives to investment, such as reductions in taxes on shares for retail investors.
They have faced steep criticism in the City amid efforts to bolster interest in UK stock markets which have lagged growth rates witnessed on the continent and in the United States.
The report’s lead author Nigel Wilson, the former boss of Legal & General, told the Reuters news agency: “We’ve underinvested in the UK for such a long time, there’s a massive gap between the other G7 countries and ourselves.

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Second class letter deliveries may be cut to three days per week

Zubair — Thu, 12 Sep 2024 00:27:00 +0000

Royal Mail may be obligated to only deliver second class letters three days per week in future, under plans being considered by the industry regulator.
Ofcom, which launched a consultation on the company’s universal service obligation (USO) earlier this year, said such a shift would protect priority deliveries, including first class mail, and help loss-making Royal Mail save cash.
The watchdog said “modifications” to second class deliveries were being explored under proposals that would seek to meet the needs of households and businesses following sharp declines in letter volumes as communication technology has evolved.
In addition to no second class mail deliveries on a Saturday, the plans could also see them made only on alternative weekdays – every Monday, Wednesday and Friday.
Ofcom said delivery targets for such items would remain at three working days despite the proposed reduction in deliveries.
First class post would continue to be a six-day-a-week service, the regulator stated, adding that decisions on its plans would be made by next summer following further consultation.

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New car sales fall in UK as Europe’s manufacturers feel strain from weak demand

Zubair — Thu, 12 Sep 2024 00:22:08 +0000

Sales of new cars in the UK fell last month, according to industry data highlighting the stubborn difficulties manufacturers and showrooms across Europe are facing.
The Society of Motor Manufacturers and Traders (SMMT) reported a 1.3% decline in August compared to the same month in 2023, with 84,575 new cars sold.
“Heavy” summer discounting continued to drive electric vehicle (EV) sales, the industry body said, rising almost 11%.
But the SMMT warned that much would depend on the “critical” current month, which sees the release of the new 74 number plates.
It reiterated its plea for more government aid to help drive EV sales.
The outlook remains challenging for manufacturers globally due to weak demand from a wealth of headwinds including continued constraints on consumer finances at a time of heavy investment in EV technology.
Pressures facing Europe’s car manufacturers, including those in the UK, mount up to one of a lack of competitiveness – especially in the face of cheaper EVs from China.
High energy prices and wages are just two of the imbalances, with the European Union imposing additional tariffs on Chinese-made EVs on the grounds that their lower prices points are the result of state subsidies.
The shift towards electric cars is also being hampered by caution among buyers over electric vehicle ranges and a lack of infrastructure to support the vehicles.
A major stumbling block has always been prices, with electric cars remaining more expensive generally than a comparable model powered by petrol or diesel.
SMMT chief executive Mike Hawes said on Thursday: “August’s EV growth is welcome, but it’s always a very low volume month and so subject to distortions ahead of September’s number plate change.
There were signs this week that the pressure is beginning to take its toll, as manufacturers across Europe demand greater government support to help the battle against climate change through the transition to EVs.

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Shop prices fall for first time in nearly three years but may rise again – BRC

Zubair — Wed, 28 Aug 2024 10:32:06 +0000

Shop prices fall for first time in nearly three years but may rise again – BRC
Shop prices have come down for the first time in nearly two years, according to industry data.
Goods in UK shops cost 0.3% less in August than a year ago, figures from industry body the British Retail Consortium (BRC) showed.
The price fall is due to discounts on summer clothing and other seasonal household goods. Wet weather and the cost of living crisis prompted retailers to sell reduced items to shift stock, the BRC said.
Trading had been difficult for shops due to those factors, it added.
Prices had been rising but at a slower pace each month. Not since October 2021 have prices dropped.
While some prices are still going up, they’re going up less than previous months.
Food inflation stood at a reduced 2%. According to the data, there was 0.3% deflation (price falls) overall as non-food items became 1.5% less expensive this month.
It was the biggest monthly food inflation decrease since December 2020 as fresh food prices, particularly fruit, meat and fish, eased as suppliers’ costs lessened.
This may not continue, according to the BRC’s chief executive Helen Dickinson.
“The outlook for commodity prices remains uncertain due to the impact of climate change on harvests domestically and globally, as well as rising geopolitical tensions.
“As a result, we could see renewed inflationary pressures over the next year.”
The official measure of inflation may tick up as energy prices rise in the autumn, with the energy regulator Ofgem raising the cap from October.

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Mortgage market `robust’ ahead of Bank of England interest-rate decision

Zubair — Wed, 31 Jul 2024 08:21:32 +0000

The number of mortgage approvals in the UK was “broadly stable” last month, the Bank of England has said.
There were 59,976 net approvals in June, down slightly from 60,134 in May, according to officials figures on Monday.
The Bank also said net borrowing of mortgage debt increased from £1.3bn in May to £2.7bn in June.
It comes ahead of the Bank’s latest interest rate decision on Thursday.
Commentators said the figures demonstrated a “strong foundation” for further growth in the housing market, which appears not to have been significantly affected by the recent general election.
But they cautioned much would depend on whether or not rates are cut later this week.
Industry figures hope that a reduction in the cost of borrowing will boost home sales, with better mortgage deals encouraging potential buyers.
Interest rates have been held at 5.25% seven times in a row, but financial markets have priced in a 60% chance of a cut on Thursday.
It marks an improvement on last week, when the chances of a cut were estimated at 46%.
Last week Nationwide became the first major lender to introduce a mortgage deal for less than 4%. Barclays and TSB also announced reductions the next day.

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Fuel prices remain a rip-off,competition watchdog declares

Zubair — Wed, 31 Jul 2024 08:19:43 +0000

Competition among fuel retailers is “failing consumers” because drivers are still paying too much to fill up, according to regulators.
In an update on its monitoring of the fuel market, the Competition and Markets Authority (CMA) said the cost to all motorists from the previously identified increase in retail fuel margins since 2019 was over £1.6bn in 2023 alone.
The watchdog found last year that drivers had overpaid in 2022 by £900m at supermarket fuel sites alone.
The CMA also announced that it would give separate updates in the autumn on its work covering the cost of baby infant formula and supermarket loyalty schemes.
It added there was little evidence supermarkets’ loyalty prices were misleading shoppers, as consumer groups have widely suggested.
The regulator’s fuel price study has resulted in action aimed at bolstering competition but it is yet to get up to speed.
The CMA said it was supportive of continuing efforts to secure a compulsory fuel price monitoring system to help consumers make informed choices at the pumps.
As the new government presses ahead on plans for Pumpwatch, the CMA said its temporary price data-sharing scheme was still only covering 40% of service stations.
It admitted it was not comprehensive enough to be utilised by map apps or sat-navs to bring accurate, live information to people.

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Millions of people not working is `unacceptable’ says Labour

Zubair — Thu, 18 Jul 2024 20:52:51 +0000

Rising levels of worklessness are “unacceptable” and require “immediate action”, the new Labour government’s jobs minister has said.
Liz Kendall is proposing several measures including a new national jobs and careers service to tackle record youth unemployment and rising numbers of those out of work due to long-term sickness.
On her first ministerial tour as Secretary of State for Work and Pensions, Ms Kendall will also announce a more localised approach to upskill those out of work and tackle the root causes of unemployment.
But the Conservative party said the government must “wake up” to the “huge cost” the reforms will cost the taxpayer.
“Unless action is taken, the working-age welfare bill will rise by more than £20bn a year by the end of the decade,” a Conservative party spokesperson said.
Ms Kendall’s proposals include merging the National Careers Service and the Jobcentre Plus, in an effort to get more people into work and support people to find better paid jobs.
Currently, the National Careers Service, which focuses on careers advice, is run by the Department of Education, while Jobcentre Plus, focused on welfare applications, is run by the Department for Work and Pensions.
Labour is also promising:
New work, health and skills plans for “economically inactive” people who are not looking for work or available to work. These would be led by local mayors and councils.
A “youth guarantee” for everyone aged 18-21 which will see more opportunities for training, an apprenticeship or help to find work offered to all in this age category.
It said the guarantee would help “to prevent young people becoming excluded from the world of work at a young age”.
According to the Office for National Statistics, about a quarter of people of working-age – nearly 11 million people – do not currently have jobs.
About 1.5 million are classed as unemployed, meaning they are unable to find a job.
The rest are considered to be economically inactive, with the number in this category rising as more people take early retirement, face sickness, or cannot afford childcare.
“Economic inactivity is holding Britain back,” Ms Kendall said. “It’s not good enough that the UK is the only G7 country with employment not back to pre-pandemic levels”.
The Recruitment and Employment Federation, which represents the recruitment sector, said the new government’s “early start” on reducing joblessness was “vital”.
“The rewards are tantalising for the government if it can harness the personal choices individuals make in needing and wanting flexible work opportunities,” said the REC’s deputy chief executive, Kate Shoesmith.
Disability equality charity Scope praised the government’s “positive vision” but said it should reassure disabled people who are unable to work “that they won’t be forced into unsuitable jobs, or have vital financial support taken away”

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