[ad_1]
Introduction: UK house prices fell by 1.4% in November
Good morning, and welcome to our rolling coverage of business, financial markets and the world economy.
UK house prices fell at their fastest pace in nearly two and a half years last month as the sector was hit by turmoil following September’s mini-budget.
Median home prices fell 1.4% on a seasonally adjusted basis in November, figures just released show. across the country Building Society Show.
That followed a 0.9% decline in October, indicating the housing market is cooling after strong growth since the pandemic began.
That was the biggest monthly decline since June 2020 and dragged annual house price growth to 4.4% in November, from 7.2% in October.
💥 UK house prices fell 1.4% in November from October, the biggest monthly fall since June 2020 – @AskNationwide
💥 Annual house price growth eased to 4.4% in November from 7.2% in October.
— Andy Bruce (@BruceReuters) December 1, 2022
The average property price fell from £268,282 to £263,788, as a rise in mortgage rates made it harder for buyers to buy a home.
Robert Gardner, Nationwide’s chief economist, Explains that last month’s “mini-budget outcome continued to impact the market”.
While financial market conditions have stabilized, interest rates for new mortgages remain high and the market has lost a significant amount of momentum. Housing affordability for potential buyers and home movers has become even more stretched at a time when household finances are already under high inflationary pressure.
Data from the Bank of England this week showed a sharp fall in mortgage approvals in October, as the mini-budget caused market chaos by raising borrowing costs.
The market is likely to slow down in the next quarter, Gardner Forecast:
Inflation is set to remain high for some time and the Bank of England wants to ensure that demand in the economy slows down to alleviate domestic price pressures and Bank Rate is likely to rise further.
“The outlook is uncertain, and much will depend on how the broader economy performs, but a relatively soft landing is still possible.
Still, he pointed out, long-term borrowing costs have fallen in recent weeks and could moderate further, as investors dial down their expectations for future Bank of England interest rate hikes.
Property website Zoopla on Monday reported that many home-sellers are accepting bids below their asking price.
agenda
-
7am GMT: Nationwide House Price Index for November
-
9am GMT: Eurozone flash manufacturing PMI for November
-
9.30am GMT: UK flash manufacturing PMI for November
-
10am GMT: Eurozone unemployment report
-
1.30pm GMT: US PCE measure of inflation
-
3pm GMT: US flash manufacturing PMI for November
Major events
The US manufacturing sector contracted for the first time since June 2020.
Data provider S&P Global reported that output fell in November, as new orders fell at a faster pace.
That US manufacturing PMI fell to 49.0 from 50.2 in October, indicating a slowdown in activity.
The slowdown was the sharpest since May 2020 and was driven by a decline in output and new orders, the S&P Global report added:
Demand conditions in domestic and external markets weakened, as new export orders declined further. Employment growth slowed as capacity pressure eased and the work backlog contracted sharply.
On a more positive note, supply chains improved for the first time since October 2019, with reduced demand for inputs from companies easing price pressures. Input costs rose at the slowest rate for two years.
⚠️ BREAKING: US ISM Manufacturing PMI Actual 49.0 (Estimated 49.7, Previous 50.2) $MACRO
— Breaking Market News ⚡️ (@financialjuice) December 1, 2022
On Wall Street, the S&P 500 index opened 0.3% higher.
The share index rose 11 points to 4,091.
US stock index futures rose on Thursday after the Federal Reserve’s preferred inflation gauge showed inflation cooling in October, while reports suggested China is taking steps to ease its Covid restrictions to help its economy recover: https://t.co/ljVUSCucLC pic.twitter.com/EdXPV1xYZw
— MarketWatch (@MarketWatch) December 1, 2022
Summary of the afternoon
Here are today’s top stories….
Europe’s energy squeeze intensifies:
Chart of the day: Electricity prices in the Nordic region have skyrocketed so far this week, overshadowing tightness in Germany, France and the UK. On a weekly average, Nordpool day-head is just under €350 per MWh, its second highest weekly ever. #EnergyCrisis pic.twitter.com/sBeI8UwsvB
— Javier Blas (@JavierBlas) December 1, 2022
Next has confirmed that it has acquired some of the assets of collapsed fashion brand Jules for £34m in partnership with its founder Tom Joule.
Next is also buying Joules’ head office for £7m in cash.
Administrators for Jolls will close 19 stores today, cutting 133 jobs.
John ColdhamA retail partner in a law firm Gowling WLGsays:
Next continues its acquisition spree, enhancing its competitiveness by building a strong stable of respected brands from across the spectrum of homeware and fashion.
The global interest in the Joules brand in the bidding process shows what Next Reach can achieve internationally as well as at home. Retail is an unforgiving environment at the moment, but strong brands are one of the keys to keeping customers coming back.
The pound continues to rally against the euro as well as the dollar:
The pound is up $1.22 against the US$ today. The highest since early August pic.twitter.com/qUFV8ZPyrK
— Ed Conway (@EdConwaySky) December 1, 2022
The US Federal Reserve’s inflation measure has been cut.
The PCE index, which measures prices paid for domestic purchases of goods and services, rose 6% in the 12 months to November, up from 6.3% in October.
Core PCE slowed to 5% from 5.2%, which may reassure central bank policymakers that recent interest rate hikes are cooling inflationary pressures.
Choice of Fed #inflation The gauge rose at a slower pace in November, PCE +6% vs. Core rate also slowed with +6.3%. Jobless claims retreated from a 3-month high of -16K to 225K. #DOW +15
— Jason Brooks (@brookskcbsradio) December 1, 2022
Core PCE: The three-month average is up 4.8% and up 4.984% from a year ago. A gradual slowdown in one of the Fed’s key policy variables. My understanding is that it will become sticky at about 4%. And everyone should start looking at pre-housing services going forward.
— Joseph Brusuelas (@joebrusuelas) December 1, 2022
US Treasury Yields Fall After PCE Data; The 10-year fell 12.50 BPS on the day at 3.576%
Stock news alerts in bio
— Yelpful Stock Alerts (@FastestAlert) December 1, 2022
US weekly jobless claims drop
Fewer Americans filed new claims for unemployment assistance last week.
225,000 initial claims were filed in the week to November 26, up from 241,000 in the previous seven days.
However, the number of people receiving support for at least two weeks rose by 110,000 to 1,337,838.
“A wave of industrial action is having a crippling effect on British businesses”, reports Susannah Streeter, senior investment and market analyst at Hargreaves Lansdowne:
She points out that the problems will be exacerbated by fresh strikes in the UK in December.
Already in October, one in eight companies said they were affected by walkouts (see previous post). The toxic combination of rail and postal strikes is taking a heavy toll on companies, with a quarter of those affected unable to get the goods they need for their businesses.
Another 24% of businesses said they were unable to operate fully, while 23% could not receive the services they needed.
Next picks up Jules, a fashion chain that has fallen out of administration
Sarah Butler
Next has picked up collapsed fashion chain Jules from administration, saving more than 100 stores and hundreds of jobs, the Guardian understands.
Sources said Next placed a last-minute bid early on Thursday, beating out one placed by South Africa’s Foschini Group, owner of Hobbs and Whistles.
After failing to secure emergency funding, Joules called in administrators last month, putting 1,600 jobs and the future of the retailer’s 132 stores at risk. The shops continued to trade as managers at Interpath Advisory said they would “assess options for the business”.
Jolls, known for its jackets and patterned Wellington boots, has been struggling for months with falling sales. He attributed the slow trade to the life crisis and the UK’s dry and hot summers, which have reduced demand for his posh wellies.
Bloomberg’s John Stepak shows that UK house price rises are lagging behind annual inflation:
House prices in the UK fell by 1.4% last month. That’s the second monthly drop in a row, at least according to Nationwide.
And if you exclude the period in 2020 when the housing market basically shut down, that’s the biggest monthly decline since February 2009. Which, of course, was in the wake of the financial crisis.
So after a very big fall. That means house prices are now only 4.4% higher than they were last November (and that’s only in nominal terms. If you factor in inflation at over 10%, we’re already significantly down in “real” terms).
Looking at this morning’s fall in house prices… Nathan EmersonChief Executive PropertymarkThe UK professional body for estate agents says the market is ‘rebalancing’.
“Our agents report a rebalancing within the market as competition for homes begins to slow, so it’s no surprise that house price growth is slowing along with it.
“This knock-on effect is being seen in achieved prices is positive as we need this to settle in line and return to a more realistic and sustainable market. However, with prices higher than last year and the increase in stamp duty threshold, it is a good time to buy or sell a property.”
Next is the collapsed fashion retailer upping the ante, says Sky News
Revealed: Next has managed to secure a deal to take fashion retailer Joules out of administration, beating rival bidder Foschini Group at the last minute of a crowded auction process.
— Mark Kleinman (@markkleinmansky) December 1, 2022
[ad_2]
Source link
