OECD warns surge in inflation could undermine global recovery – Business Live | Business
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House price growth in the UK picked up again last month as demand continues despite the end of the job protection program and stamp duty relief this fall.
The average UK home price rose 0.9% in November, according to data released by Nationwide, after rising 0.7% in October. This pushed the average home price 10% higher than a year ago.
House prices are now almost 15% above their level in March 2020 when the pandemic hit the UK, according to Nationwide, as the shift to working from home pushed people to seek larger homes in more rural areas.
Robert gardner, at national scale The chief economist said annual house price growth remained strong last month, despite a sharp drop in transactions in October after stamp duty rates returned to normal.
“There have been signs of slowing activity in the housing market in recent months. For example, the number of real estate transactions fell by almost 30% year-on-year in October. But that was almost inevitable, given the stamp duty holiday expired at the end of September, which gave buyers a strong incentive to advance their purchase to avoid an additional tax.
“Indeed, activity has been extremely dynamic in 2021. The number of real estate transactions so far this year has already exceeded the number recorded in 2020 with two months still to go and is in fact approaching the number observed at the same stage in 2007, before the global financial crisis hit.
The reduction in the stamp duty on home purchases in England and Northern Ireland ended at the end of September, after being completed earlier in Wales and Scotland.
UK mortgage approvals fell to their lowest level since mid-2020 in October, but Gardner argues underlying activity appears to be holding up well, with approvals above the 2019 monthly average. .
Early indications also suggest that labor market conditions remain robust, despite the holiday program ending in late September, he adds:
If this continues, housing market conditions could remain quite dynamic over the next few months, especially as the market is dynamic and it is possible that the changes underway in housing preferences, to following the pandemic, continue to support the activity.
Also coming today
Factory health checks in the UK, Eurozone and US will show how manufacturers fared in the past month, in the face of continuing supply chain issues and increasing Covid cases -19 in some countries.
Already today, manufacturing surveys from all over Asia have shown activity stabilized last month amid easing lockdown and border restrictions.
Financial markets remain volatile, stocks are expected to rise this morning after being hit by concerns over the Omicron variant yesterday.
Equities were also hit yesterday by Jerome Powell, after the Fed chairman suggested the US central bank could end its bond-buying stimulus package faster than expected, to fight inflation .
Ipek Ozkardeskaya, senior analyst at Swissquote, Explain :
Inflation is “not transient,” said Federal Reserve Chairman Jerome Powell during his Senate testimony yesterday, and stock markets took the phrase “no transient” as a slap in the face. Most stocks plunged yesterday as many weren’t expecting to hear a hawkish Powell as the new omicron wave threatens the economic recovery.
We now know that Jerome Powell thinks “it is appropriate to discuss whether it will be appropriate to close the QE purchases a few months earlier,” at the next FOMC meeting in a few weeks, and a more close. Early in the QE program would also mean an earlier rise in interest rates, although Powell wants investors to dissociate the connection between the timing of the QE cut and the first rate hike.
- 9am GMT: Euro zone manufacturing PMI report for November
- 9:30 a.m. GMT: UK manufacturing PMI report for November
- 10am GMT: OECD to publish latest Economic Outlook
- 13:15 GMT: ADP survey on the evolution of the US private sector payroll in November
- 3 p.m. GMT: Fed Chairman Jerome Powell testifies before House Financial Services Committee