Mortgage approval dropped.

Samuel Tombs, chief UK economist at consultancy Pantheon Macroeconomics, said the average mortgage rate would probably soar to 6 per cent at the start of 2023 and that mortgage approvals would continue to fall as the squeeze on real incomes intensified. As a result, he forecasted that UK house prices would. As a result, it loses 8 per cent in the next 12 months. «Given we still think mortgage rates will average 5 per cent in 2023, we expect a 12 per cent peak-to-trough fall in house prices,» he said. Tom Bill, head of UK residential research at estate agent Knight Frank, said he expected house prices to drop about 10 per cent over the next two years «as a new lending landscape emerges after 13 years of ultra-low rates».

The property market is already showing many weaknesses, with the average UK house price flatlining in September for the first time in almost a year. In addition, newer data from mortgage provider Halifax showed house prices falling between September and October, the first drop since July 2021. BoE data also showed net borrowing of the mortgage debt by individuals declined month on month from £5.9bn to £4bn, the lowest since November 2021 and well below analysts’ forecasts.

www.sba.tax

Comments

Cloud Bookkeeping

US FED rate rise.

The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...

EU business slide.

S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...

EU debt reduction

Brussels wants to give EU capitals extra time to curb their debts and create space for public investment as part of an overhaul of the EU’s deficit rules . The European Commission would table a proposal at the end of the month to reform the Stability and Growth Pact , under which it would work out multi-year , country-specific plans with capitals for getting their debt burdens under control , EU officials said . The proposals come as member states face mounting fiscal burdens as they spend hundreds of billions of euros sheltering businesses and households from the energy crisis . Under the new blueprint , the commission would propose a four- or five-year plan to an EU member state to get its public debt burden on a credible , downward trajectory , officials said . The national fiscal plan would need to pass a debt sustainability analysis and be approved by the commission and EU council . The new regime would ditch an EU ...

Search This Blog