UK Housing Market Pessimism and Its Implications: RICS Survey Sparks Concerns

GBP: Housing market pessimism starting to show

Earlier today, we saw the release of the RICS UK house price data survey, which showed the most pessimism over UK house prices since early 2009. It will be interesting to see whether this starts to feed more heavily into UK consumer confidence and spending. We also expect it will pressure the pricing of the Bank of England cycle, where another 50bp of tightening is still seen. Next week's release of UK earnings data, plus the July CPI, will be the next major catalyst for this story.

EUR/GBP seems happy to trace out an 0.8600-0.8650 range for the time being. But we are happy with our upside bias towards the 0.88 area for later in the year.