Day: 1 November 2023

Posted on

UK house prices experience biggest rise in over a year

UK house prices up

House prices had the biggest monthly rise in October for more than a year, according to the Nationwide Building Society.

However, they were still down sharply on a year ago, the UK’s biggest building society noted. The rise in prices was most likely due to there not being enough properties to meet demand.

However, activity in the housing market is still extremely slow, as buyers struggle with higher mortgage rates.

Interest rates, which underpin mortgage pricing, have moderated recently but they are still well above the lows of 2021. The Bank of England has raised interest rates from lows of around 0.1% to 5.25% in its inflation battle.

UK inflation is over 6.5% – the target is 2%.

Posted on

Euro zone inflation drops to 2.9% in October 2023

EU Inflation

According to the latest data from Eurostat, the statistical office of the European Union, the euro area annual inflation was 2.9% in October 2023, down from 4.3% in September 2023.

The main factor behind the decline in inflation was a sharp drop in energy prices, which fell by some 15% year-on-year in October 2023, compared to a 10.7% decrease in September. 

The euro area economy also contracted by 0.1% in the third quarter of 2023, after growing by 0.6% in the second quarter, according to preliminary estimates from Eurostat. This puts the eurozone on the brink of recession, as high interest rates and weak demand weigh on the economic activity. 

However, some analysts argue that the ECB’s monetary policy is too tight and risks choking off the recovery. They suggest that the ECB should adopt a more flexible approach and consider cutting rates or expanding its bond-buying programme if the economic outlook worsens.

Core inflation

Core inflation which excludes volatile food and energy prices dropped to 4.2% year-on-year in October 2023 from 4.5% in September 2023, according to European Union statistics agency Eurostat.

The agency also revealed Tuesday that the euro zone economy contracted by 0.1% in the third quarter, according to initial estimates, below consensus estimates for GDP to be unchanged from the previous quarter.

Predicition

The ECB expects the euro zone economy to grow by just 0.7% this year, by 1% in 2024 and 1.5% in 2025.