UK house prices rise by more than expected for fifth month in November

UK house price growth, however, slowed on an annual basis to 3.9 percent in the three months to November, following a 4.5 percent rise in October. (Reuters)
Updated 07 December 2017
0

UK house prices rise by more than expected for fifth month in November

LONDON: British house prices rose by more than expected in November and for a fifth month in a row, mortgage lender Halifax said on Thursday.
House prices rose 0.5 percent month-on-month after a 0.3 percent rise in October, Halifax said, topping the consensus in a Reuters poll of economists for a 0.2 percent rise.
But house price growth slowed on an annual basis to 3.9 percent in the three months to November, following a 4.5 percent rise in October.
“The imbalance between supply and demand continues to support house prices, which doesn’t look like changing in the near future,” Russell Galley, managing director of Halifax Community Bank, said.
Other data suggest the housing market is slowing. Nationwide, a different mortgage lender, has reported a weaker pace of house price growth recently and the Bank of England has said mortgage approvals have fallen to a more than 1-year low.
The figures come two weeks after finance minister Philip Hammond delivered a budget that included measures to help first-time buyers and spur more housebuilding.
“Even if successful, the chancellor’s measures to boost house building in the budget will take time to have a significant effect so are unlikely to markedly influence house prices in the near term at least,” Howard Archer, chief economic adviser to the EY ITEM Club consultancy, said.
He added that house prices are likely to rise between 2 and 3 percent in 2018.


Weekly Energy Recap: Too early to gauge trade tension fallout on oil markets

Updated 19 August 2018
0

Weekly Energy Recap: Too early to gauge trade tension fallout on oil markets

  • Oil prices have moved in narrow band since June
  • Brent/WTI spread widens over week

Brent crude finished the week at $71.83 per barrel while WTI dropped to $65.91 as the Brent/WTI spread widened to $5.92 per barrel.
Oil prices fell as a result of market sentiment impacted by hypothetical fears over lower global economic growth.
Brent crude price fell below $72 for the first time since mid-April 2018.
Oil prices have moved in a narrow band since early June 2018.
The Brent price had been hovering between $73 and $78, until it dropped to nearly a four-month low at the middle of the week, then recovered by the week’s closing.
Oil fell after both OPEC and the International Energy Agency’s (IEA) monthly oil market reports forecasted lower growth in oil demand.
This was claimed to be a result of the major downside risk on economic growth amid US-China trade tensions.
These are reportedly impacting emerging economies across Asia as a strengthening dollar weakens their local currencies, and thus reduces purchasing power for transport fuel.
On the other hand, the IEA reported that oil consumption for plastics and other petrochemicals will keep demand growing and elevated for decades as this is driven by population growth and urbanization.
After oil inventories in the US fell to the lowest level since February 2015, last week, the US Energy Information Administration (EIA) reported an unexpected significant build up in US commercial crude oil inventories of 6.8 million barrels. This brought oil inventories slightly back above the five-year average.
The drawdown in US refined products inventories came on the back of US refineries running at a record capacity. On average they refined 18 million barrels per day for the first time, in order to meet high gasoline demand for the summer season.
This was an increase of 383,000 barrels per day on the previous week’s average.
Analysts are also making much about Saudi Arabia’s output cuts for July 2018. Last month the Kingdom lowered output by 200,000 barrels per day to 10.288 million bpd. My perspective on this is that it has nothing to do with potentially lower economic growth as a result of trade disputes between the US and China, nor emerging market turmoil.
Instead, as the world’s swing producer, the Kingdom must track the output of other OPEC nations and adjust its production accordingly. This is exactly what happened after Libyan oil output recovered and exceeded one million barrels per day for the first time since last June. Consequently, Saudi Arabia reduced production.
Saudi Arabia, as the only swing producer, changes its crude oil production to meet fluctuations in market demand. In reality, it’s far too early to know what influence trade tensions will have on economic growth. It will take time for such impacts to materialize and weigh on the market fundamentals.