Prices sought for houses across England and Wales fell 0.8 per cent during July, their first decline since December, a report by property website Rightmove showed last week. Prices sought in London fell 0.4 per cent from June to an average £587,174 (€742,251).
The report adds to signs the UK property market is losing momentum, after the Bank of England said it posed the greatest risk to the economic recovery. Financial stability officials set property lending curbs last month to prevent frothy prices leading to an excessive build-up of debt.
In the meantime, consumer prices in the US accelerated in June as the cost of food and rent went up. According to data published by the US Labour Department, the consumer price index for June was the latest evidence that US inflation is on the rise after several years when it was dormant.
The index rose a seasonally adjusted 0.3 per cent in June compared to the previous month. Excluding volatile items such as food and energy, prices rose 0.1 per cent.
The year-over-year increase in all prices was 2.1 per cent, and prices excluding food and energy slipped to a 1.9 per cent annual gain in June from May’s two per cent. However, there is little evidence of runaway price rises that would force the Federal Reserve to abruptly alter its loose monetary policy and raise interest rates.
Finally, preliminary data published by market research group Markit showed that the manufacturing sector in the euro area expanded at a faster rate than anticipated in July, easing concerns over the region’s growth outlook.
The Markit preliminary manufacturing purchasing managers’ index (PMI) rose to a seasonally adjusted 51.9 in July, up from a final reading of 51.8 in June. Economists had expected the index to ease down to 51.7 in July.
Meanwhile, the preliminary PMI for services improved to a seasonally adjusted 54.4 in July from a final reading of 52.8 in June. Analysts had expected the index to decline to 52.7.
The seasonally adjusted Markit Flash Euro Zone Composite Output Index, which measures the combined output of both the manufacturing and service sectors, rose from 52.8 in June to a three-month high of 54.0 in July.
This article was compiled by Bank of Valletta for general information purposes only.