A Halifax survey published last week revealed that in the three months to April, UK house prices rose by 9.2 per cent from last year, lower than the 10.1 per cent increase reported in the three months to March and the 9.6 per cent increase predicted by economists.
House prices declined by 0.8 per cent month-on-month in April, following March’s 2.2 per cent increase. Economists had projected a 0.3 per cent drop.
However, Martin Ellis, housing economist at the Halifax, said that existing market environment stayed very tight, as the supply and demand mismatch continues. This situation, combined with low interest rates lower unemployment and increase in real earnings, should support house prices over the coming months.
Separately, European Central Bank (ECB) vice president Vitor Constancio said the bank’s latest stimulus measures need time to boost growth and stoke inflation in the eurozone.
“The ECB will continue to do what is necessary to achieve its goal of reaching a level of inflation close to two per cent and enough policy tools can still be used,” Constancio said in a speech in London. “Our monetary policy has been effective. We have to allow some time for the measures launched in March to produce their effects, while closely monitoring external developments.” His remarks imply that it is not likely that the ECB will ease policy in the short term.
Finally, in the Germany, industrial output slid at the fastest rate since August 2014, mainly due to a weak construction sector, though exports improved the most in six months.
German statistics office, Destatis, reported last week that industrial production fell by 1.3 per cent on a monthly basis in March, after a reviewed 0.7 per cent drop in February. This was the second sequential decline and the biggest since August 2014, when output had fallen by 2.5 per cent.
Economists had predicted a marginal drop of 0.2 per cent for March. Ralph Solveen, an analyst at Commerzbank, said the decline was due to an unusual drop in construction output, where the prior month’s data had been distorted upwards by the abnormally mild weather.
This article was compiled by Bank of Valletta plc for general information purposes only.