Mixed signals in housing market
Tuesday 05 August 1997
Analysts remained divided about whether or not the Bank would announce the fourth increase in the cost of borrowing in four months after its meeting ends on Thursday.
Halifax reported yesterday that house prices had remained almost flat last month, climbing only 0.1 per cent. The annual rate of increase slowed to 6.4 from 7.1 per cent in June.
Halifax said the housing recovery would continue, describing the market as "well supported". But its downbeat figures contrasted with Nationwide's alternative measure. On Friday Nationwide said its house price index had jumped 1.8 per cent in July, with the annual rate picking up to 12.2 per cent.
A spokeswoman for Halifax claimed its rival's figures reflected a bias towards London and the South-east. But Nationwide said its figures were weighted to adjust for regional differences and were more reliable because they were based on a bigger number of housing transactions than the Halifax measure.
With mixed signals on the housing market, a separate indicator yesterday pointed to slower growth in cash in circulation last month. The growth in the narrow money measure M0, of which cash forms the biggest component, eased to 5.9 from 6.2 per cent in June.
This was its slowest annual growth rate for 18 months. But economists were wary about drawing any conclusions for high street spending, as retail sales growth has picked up during this year.
Adam Cole, UK economist at James Capel, said consumers were spending on big-ticket items which were unlikely to be paid for in cash. Analysts also pointed out that all other recent indicators of consumer spending had indicated booming demand. Yesterday's figures were not enough to change the minds of the Bank's experts if they wanted to raise interest rates.
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...