UK house prices fall for first time since 2012

A further easing of broader lockdown measures in the coming weeks is likely to lead to a slight pick-up in activity in the British housing market. (AFP)
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Updated 01 July 2020

UK house prices fall for first time since 2012

  • Country reels from the coronavirus shock to the economy
  • The government eased restrictions on the housing market in mid-May

LONDON: Britain’s house prices fell in annual terms for the first time since 2012 in June as the country reeled from the coronavirus shock to the economy, mortgage lender Nationwide said on Wednesday.
Nationwide said its measure of house prices fell by 0.1 percent compared with June of last year.
In monthly terms, prices fell by 1.4 percent, not as steep as May’s 1.7 percent fall, which was the biggest drop in more than 11 years.
A Reuters poll of economists had pointed to an annual rise of 1.0 percent and a monthly fall of 0.7 percent.
The government eased restrictions on the housing market in mid-May but data published by the Bank of England earlier this week showed the lowest number of mortgage approvals on record during that month.
Nationwide’s chief economist, Robert Gardner, said a further easing of broader lockdown measures in the coming weeks was likely to lead to a slight pick-up in activity in the housing market, but the medium-term outlook remained highly uncertain.
“The raft of policies adopted to support the economy, including to protect businesses and jobs, to support peoples’ incomes and keep borrowing costs down, should set the stage for a rebound once the shock passes, and help limit long-term damage to the economy,” he said.
Nationwide said on a seasonally adjusted basis, house prices in June were 3.2 percent lower than in April.
It said its sample sizes had remained sufficiently large to generate an accurate reading of price changes.
In London, house prices rose by an annual 2.1 percent over the second quarter and average prices in the capital were just 3 percent below all-time highs struck in early 2017.
A Reuters poll of property market analysts published last week showed prices in London were expected to fall 5.0 percent this year before rising 2.0 percent next year and 4.3 percent in 2022.


US job growth slows sharply in July

Updated 46 min 32 sec ago

US job growth slows sharply in July

  • Nonfarm payrolls increased by 1.763 million jobs last month after a record 4.791 million in June
  • The US economy suffered its biggest blow since the Great Depression in the second quarter

WASHINGTON: US employment growth slowed considerably in July amid a resurgence in new COVID-19 infections, offering the clearest evidence yet that the economy’s recovery from the recession caused by the pandemic was faltering.
Nonfarm payrolls increased by 1.763 million jobs last month after a record 4.791 million in June, the Labor Department said on Friday. Economists polled by Reuters had forecast 1.6 million jobs were added in July.
The unemployment rate fell to 10.2 percent from 11.1 percent in June, but it has been biased downward by people misclassifying themselves as being “employed but absent from work.” At least 31.3 million people were receiving unemployment checks in mid-July.
“The steam has gone out of the engine and the economy is beginning to slow,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. “The loss of momentum will continue and my concern is that the combination of the virus resurgence and lack of action by Congress could really push employment into negative territory.”
The labor market step-back is more bad news for President Donald Trump, who is lagging in opinion polls behind former Vice President Joe Biden, the presumptive Democratic Party nominee for the Nov. 3 election.
It also piles up pressure on the White House and Congress to speed up negotiations on a second aid package, which have been dragging over differences on major issues including the size of a government benefit for tens of millions of unemployed workers.
A $600 weekly unemployment benefit supplement expired last Friday, while thousands of businesses have burned through loans offered by the government to help with wages.
The economy, which entered into recession in February, suffered its biggest blow since the Great Depression in the second quarter, with gross domestic product dropping at its steepest pace in at least 73 years.
Infections of the respiratory illness soared across the country last month, forcing authorities in some of the worst affected areas in the West and South to either shut down businesses again or pause reopenings, sending workers back home. Demand for goods and services has suffered.
The slowdown in hiring challenges the US stock market’s expectation of a V-shaped recovery. The S&P 500 index is up nearly 50 percent from its March trough. As COVID-19 cases spiral, and Republicans and Democrats bicker over another stimulus package, economists see a W-shaped recovery.
Economists estimate the Paycheck Protection Program that gave businesses loans that can be partially forgiven if used for employee pay saved around 1.3 million jobs at its peak. The extra $600 weekly unemployment checks made up 20 percent of personal income and helped to boost consumer spending in May and June.