A raft of gloomy economic data will stoke fresh fears that the UK is facing a prolonged double-dip recession, as the eurozone crisis hits confidence in both the property and stock markets.
Private investors have been selling shares at their fastest rate in five years, pulling out a net £1bn in equities in the second quarter of the year, according to Capita Registrars.
Meanwhile, a national housing survey from Hometrack, published today, shows that new buyer registrations fell for the first time in five months, with demand slipping 0.5 per cent.
Richard Donnell, director of research at Hometrack, warned that prices would fall in the second half of the year by 1.3 per cent. "There's growing uncertainty over the economic outlook and the impact of the eurozone," he said.
Pessimism settling over the housing market was confirmed by a doubling in the number of postcode districts with price decreases over the month – from 12.1 per cent to 23.4 per cent.
The worrying data will heap pressure on the Bank of England Governor, Sir Mervyn King to print more money through quantitative easing when the Monetary Policy Committee meets on Wednesday.
There is speculation that the MPC could authorise a further £50bn in QE, having already injected £325bn to keep the economy afloat since 2009.
The fact that private shareholders have pulled out of equities since the start of the new financial year is worrying because there is traditionally a surge in savers investing in tax-free schemes such as ISAs.
Charles Cryer, chief executive of Capita Registrars, said: "Private investors have sold off more shares even than in the summer of 2008. The tone has certainly changed in recent months. The eurozone crisis has now reached another critical phase and hopes for the global economy have been dampened. Private investors have reacted by selling shares in large volumes."
A tough three months for equities saw the FTSE 100 index fall almost 200 points to end the April-June quarter at 5571, prompting talk of City job cutsReuse content