UK property market has slowed. "Overall situation remains relatively stable"
House prices in the United Kingdom fell in April by 0,1% month‑on‑month, compared to a 0.5% plunge in March, according to Halifax data.
Year‑on‑year, house prices rose by 0,4% from 0.8% a month earlier.
The average house price in April was 299,313 GBP.
"After a good start to the year, recent global events have increased uncertainty about future prospects. In particular, rising energy prices have affected inflation expectations, prompting markets to reassess the path of interest rate changes – this has already increased borrowing costs for many buyers," said Amanda Bryden, Halifax expert.
"What is understandable leads to greater caution among some households, who are again focusing on living costs and are more carefully considering planned housing changes," she added.
The agency’s statement indicates that both the outbreak and escalation of the conflict in the Middle East have weakened expectations for a rate cut.
"Before the first US attacks on Iran, it was widely expected that the Bank of England would cut the base rate this year, as inflation was still heading toward the long‑term target of 2%," it was reported.
"Instead, the bank has twice kept rates unchanged, and most analysts now predict a rate hike this year. Inflation also rose slightly to 3,3%," it added.
Despite the adverse geopolitical situation, Bryden believes the UK housing market remains resilient to such shocks.
"Although market activity is likely to slow in the near term, the overall situation remains relatively stable, supported by wage growth that still outpaces property price inflation," she said.
Source: Trading Economics.
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Bank of England hits pause. Bailey: "We will have to react"
The Bank of England, with a 1‑8‑0 vote on 30 April, decided to keep the main interest rate at 3,75%.
Andrew Bailey, the central bank chief, told CNBC that policymakers are currently facing the "most difficult combination" of economic effects that emerged with the sharp rise in energy prices caused by the war in the Middle East.
Bailey said that the prospects for price stabilization are "very uncertain", and that the "long‑term effect" of their maintenance will likely further entrench inflationary pressure.
The only person who voted for a 25 basis point rate hike was economist Huw Pill.
The Bank of England chair took a more balanced stance, while warning that further monetary policy changes could be triggered by a prolonged stalemate in negotiations between the United States and Iran.
"If we see that this situation persists, becomes permanent and persistent, we will have to react, because that is our job and that is how we bring inflation back to target levels," he said.
Source: Trading Economics.
Read also: Property market dip. Those looking for a flat "should know this" - experts say
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Source: Halifax, CNBC.
