UK house price growth eased to its lowest level in more than two years in August, but construction activity should increase to keep pace with demand, the Nationwide Building Society said last week.
House prices rose at an annual rate of 3.2 per cent, to an average £195,279. This is the lowest since June 2013. The decline was partly blamed on unusual strength in the annual measure of price gains in August last year.
On a monthly basis, prices rose 0.3 per cent from July. According to Nationwide chief economist Robert Gardner, home values may be settling around the level of earnings growth, which historically has been about four per cent.
Separately, German business confidence improved unexpectedly in August in spite of fears of a slowdown in China that took a toll on stock markets. The closely-watched survey by the Munich-based Institute for Economic Research showed German business confidence rising to a three-month high of 108.3 in August from 108 in July. Economists were predicting a fall to 107.6.
Elsewhere, official data published by the German statistics office, Destatis, confirmed an earlier estimate of second-quarter GDP growth of 0.4 per cent quarter-on-quarter, an acceleration from the 0.3 per cent growth registered in the first quarter. This increase in growth was mainly the result of strong exports.
In the US, an index of leading indicators unexpectedly fell last week. The Conference Board’s leading economic index dropped by 0.2 per cent in July following a 0.6 per cent rise in June. Economists expected the index to rise 0.2 per cent. The unexpected decrease reflected negative contributions from building permits and stock prices.
The Conference Board also reported a substantial increase in consumer confidence in the US in August, with the consumer confidence index rebounding from the drop seen last month, jumping to 101.5 in August from 91.0 in July. Economists had expected the index to show a more modest increase to a reading of 94.0.
Separately, the Commerce Department reported that the US second-quarter GDP was revised up to 3.7 per cent from an earlier estimate of 2.3 per cent, and 3.2 per cent expected by economists.
This report was compiled by Bank of Valletta for general information purposes only.