House price inflation in Britain slowed in June amid signs that the real estate market is continuing to cool, as high mortgage rates crowd out buyers from the property market, according to data published by the Office for National Statistics (ONS) on Wednesday. London was the only region where property prices actually fell.

Average UK house prices increased by 1.7 per cent in the 12 months ended June, down from the 1.8 per cent reported in May, according to the figures. The average UK house price was £288,000 in June, £5,000 higher than in the same month last year. House prices in London fell by 0.6 per cent over the same period.

Meanwhile in the US, the minutes of the July meeting of the interest rate setting Federal Open Market Committee published on Wednesday showed that policymakers were divided over the need for more interest rate hikes, with “some participants” citing the risks to the economy of raising rates too far, although “most” officials continued to give more importance to winning the battle against inflation.

The July meeting resulted in a unanimous agreement to raise interest rates by 25 basis points to a range of 5.25 to 5.50 per cent, which the markets generally expect to be the last hike of this cycle by the US central bank.

Finally, China’s central bank unexpectedly cut a key interest rate by the most since 2020 as the world’s second largest economy faces renewed risks from a deteriorating property market and weak consumer spending.

The People’s Bank of China cut the rate of the one-year medium-term lending facility (MLF) by 15 basis points from 2.65 to 2.5 per cent on Tuesday. The central bank also lowered the seven-day reverse repo rate by 10 basis points to 1.8 per cent.

The cuts come on the heels of a series of weak economic data over the past week, including sluggish trade and consumer price numbers and record-low credit growth.

 

This article does not constitute legal and/or financial advice and is being issued for information purposes only by Bank of Valletta plc, 58, Zachary Street, Valletta. Bank of Valletta is a public limited company regulated by the MFSA and is licensed to carry out the business of banking and investment services in terms of the Banking Act (Cap. 371 of the Laws of Malta) and the Investment Services Act (Cap. 370 of the Laws of Malta).