House prices in the UK tumbled at the fastest pace since October 2008, the height of the financial crisis, as rising mortgage rates made buying a new house less affordable.
House prices fell 2.3 per cent month-on-month in November following a 0.4 per cent decline during the prior month.
Other measures of house prices have also indicated that a slowdown is under way, with household budgets tightened by runaway inflation and soaring borrowing costs. In annual terms, house price growth decelerated to 4.7 per cent in November from 8.2 per cent in October.
“While a market slowdown was expected given the known economic headwinds – and following such extensive house price inflation over the last few years, +19 per cent since March 2020 – this month’s fall reflects the worst of the market volatility over the recent months,” director of Halifax Mortgages, Kim Kinnaird, said.
In the meantime, activity in the US services sector accelerated unexpectedly in November, with employment rising, signalling underlying momentum in the economy as it braces for an anticipated recession next year.
The Institute for Supply Management’s (ISM) measure of services rose to 56.5 last month from 54.4 in October, according to a report released on Monday. Readings above 50 signal expansion. The median forecast by analysts was 53.5.
Survey participants said that increased capacity and shorter lead times have continued to improve supply chain and logistics performance, noted ISM’s Anthony Nieves, adding that the sector also got a boost from the new fiscal year and holiday season, which have contributed to stronger business activity and higher employment.
Finally, the Reserve Bank of India (RBI) on Wednesday hiked the key policy rate, the repo rate or the rate at which the RBI lends to banks, in a bid to control retail inflation. The RBI’s monetary policy committee (MPC), which determines interest rates, raised the policy repo rate by 35 basis points (bps) to 6.25 per cent with immediate effect.
“India is seen as a bright spot in an otherwise gloomy global outlook but global spillovers continue to impart volatility,” RBI governor Shaktikanta Das said.
The RBI has hiked repo rates five times so far this year, starting with a 40 bps hike in May, followed by three consecutive 50 bps hikes each in June, August and September.
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).