Saturday 1 June 2019

UK house price growth cools unexpectedly in May - Nationwide

Business reporter(wp/reuters):::
British house price growth cooled unexpectedly in May to its slowest rate in three months, mortgage lender Nationwide said on Friday, countering other signs the housing market may be past the worst of its pre-Brexit slowdown.
House prices increased 0.6% in May compared with a year ago after rising by 0.9% in April. A Reuters poll of economists had pointed to a 1.2% rise in May.
House prices in May fell 0.2% from April, when they grew 0.3% on the month Nationwide said.
The figures looked at odds with other tenative signs that activity in housing market is gradually picking after slowing sharply through 2018.
While house prices have been rising across the country as a whole, prices in London have fallen according to various indicators, hit by unaffordable prices for many buyers, tax changes and Brexit uncertainty.
“Nationwide’s data confirm that house prices remain on an essentially flat trend, primarily because Brexit uncertainty has instilled some caution among buyers,” economist Samuel Tombs from Pantheon Macroeconomics said.
“The trend likely won’t improve in the next couple of months, given the political deadlock in Westminster.”
Mortgage lending data for April from the Bank of England, which had improved in recent months, is due at 0830 GMT.

Conservtive Party faces historically worst election result in Brexit crisis - poll

Political reporter(wp/reuters):::
Prime Minister Theresa May’s Conservative Party would suffer its worst general election result if a vote were held now, according to an opinion poll, as voters frustrated with the deadlock over Brexit rejected the main political parties.
The Conservatives, one of the most successful parties in the western world, would slump to third place in a nationwide vote with 19 percent, its lowest place since the party was founded almost 200 years ago, the YouGov poll for The Times newspaper showed.
The Labour Party, which is led by socialist Jeremy Corbyn and has been pushing for a softer version of Brexit, would also finish third with 19 percent of the vote, its worst performance since 1918, according to the poll.
The main beneficiaries of the swing against the two main parties would be the political parties that took unequivocal positions for or against Brexit. Voters appear to be abandoning the Conservatives and Labour, which in their own ways have been trying to offer some sort of compromise on Brexit.
The Lib Dems, which has campaigned on a straightforward demand for a new referendum, aiming to reverse Brexit, would emerge as the largest political party with 24 percent of the vote, the poll showed.
The next largest party would be Nigel Farage’s Brexit Party, which has only existed for a few months and supports a clean break with the European Union, with 22 percent of the vote.
The results underscore the growing polarisation of British politics, pointing to yet more uncertainty after the country was thrust into its biggest political crisis since World War Two, when voters opted in a referendum to leave the EU in 2016.
The United Kingdom was supposed to have left on March 29 but it remains a member of the EU and its politicians are still arguing over how, when or even whether the country will leave the club it joined in 1973.
May was forced to resign as prime minister last week after three years of trying but failing to pull Britain out of the EU, setting off a contest among lawmakers to replace her.
The Conservatives have ruled alone or in coalition for 63 years in the last century. The party, founded in 1834, has never finished outside the top two parties in a nationwide vote.
NO-DEAL BREXIT?
Leading candidates to become Britain’s next prime minister have said Britain should be ready to leave the EU with no withdrawal deal at all - a move opposed by a majority in parliament and one that the Bank of England has said could be akin to the 1970s oil shock.
One of the candidates, Foreign Secretary Jeremy Hunt, said it would be “political suicide” to pursue a no-deal Brexit, a reprimand to front-runner Boris Johnson who said last week that Britain should leave with or without a deal by the end of October.
The Confederation of British Industry, Britain’s main lobby group for business, wrote an open letter to the leadership candidates on Thursday evening, warning them they will forfeit the right to be regarded as the leader of the party of business if they fail to secure a Brexit deal.Labour has since edged closer to a position that could make it possible to call off Brexit, but has stopped short of calling for a new referendum in all circumstances and has said a general election is its preferred outcome.
Britain’s next national election is not due until 2022 although one could be called earlier in certain circumstances such as if a motion of no confidence in the government is passed by a simple majority.

Bank of England's Ramsden sees weak growth in mid-2019

Banking&Finance reporter(wp/reuters):::
Britain’s economy is likely to see slow growth through the middle of this year before picking up towards the end of 2019, Bank of England (BoE) Deputy Governor Dave Ramsden said in an interview published on Saturday.
“Given where the labour market is, given that real incomes are beginning to see some pick-up, growth might be weak in the middle of this year and then start to pick up,” Ramsden told Scotland’s Press and Journal newspaper during a trip to Inverness.In a speech to local businesses on Thursday, Ramsden said he expected growth to be a bit weaker than the BoE had forecast at the start of May due to slower investment and subdued economic productivity.
“Businesses might be more cautious to start investing again at the kind of pace that we are forecasting, because we see investment picking up to 5% or so next year. It’s currently falling on a year earlier,” he told the newspaper.
The BoE forecast in early May that the economy would grow by 1.5% this year and 1.6% in 2020 if Brexit goes smoothly.
Quarterly growth was a robust 0.5% in the first three months of 2019, but the BoE predicts this will drop to 0.2% during the current quarter as the temporary boost from pre-Brexit stockpiling fades.