Is the U.K. Housing Sector Seeing the Beginning of a Recovery?
(eToro Blog) As the U.K. Chancellor, George Osborne, prepares himself to address Parliament and his critics on the dismal growth outlook for the British economy, the economic news of the day at least didn’t bring too much added disappointment. Looked at together, though, they suggest that the government’s austerity measures are working but not crippling the economy to the extent that some have lamented.
Earlier this morning, the Nationwide Building Society released its housing price data for November, which was better than the consensus forecast. According to the data, housing prices improved on a year over year basis by 1.6%, as compared to the consensus estimate of 1.3% and the previous record of 0.8% growth. On a month to month basis, housing prices were unchanged at 0.4% in November, but beat the predictions of a decline to 0.0%.
Later, the Bank of England released statistical data on mortgage approvals, which also were better than expectations. For the month of October, there were 52,743 mortgages approved, besting September’s 51,100 approvals and the predictions of a consensus of economists who called for an increase to 51,800.
The Bank of England also reported that net lending to individuals increased in October, rising by £1.0 billion to £1.3 billion, significantly better than September’s £0.30 billion and the consensus call of £1.0 billion. The Bank of England also reports that consumer credit was generally unchanged at £0.049 billion relative to the previous 6-month average increase. Notably, credit card lending saw an increase by £0.1 billion.
Of all the data, the ones which are likely to be most appreciated by the markets are those that suggest that the U.K.’s key housing sector might be on the mend. The news has helped to give the Pound Sterling a boost, with the GBP/USD pair currently trading higher at 1.5566. The London FTSE remains under some pressure, however, and is trading just below the opening price.
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