House prices in Britain last month saw their sharpest annual fall since 2012, steepening a downturn caused by spiking mortgage rates.
Property prices fell by 1.1 per cent in February compared with the same month last year. That is down from a 1.1 per cent increase in January, mortgage provider Nationwide said last Wednesday.
Economists had forecast a 0.9 per cent contraction. The February decline in real estate prices is the first annual contraction since the initial COVID-19 lockdown in June 2020.
The recent series of weak house price data in Britain kicked off with the financial market turbulence caused by the Truss mini-Budget at the end of last September. Nationwide said it was hard to predict when the housing market might regain momentum because “economic headwinds look set to remain relatively strong”.
Meanwhile in the US, activity in the manufacturing sector contracted for a fourth consecutive month in February, albeit showing signs that factory output was beginning to stabilise, with a measure of new orders rebounding from a more than 30-month low.
The closely watched Institute of Supply Management (ISM) Manufacturing Index, a gauge of the prevailing direction of economic trends in the manufacturing sector, inched higher to 47.7 from 47.4. This reading, however, came in below expectations of 48 and also below the 50 level that separates expansion from contraction.
The Price Paid sub-index of the ISM was in focus for signs that inflation is cooling. Timothy Fiore, chair of the ISM’s Manufacturing Business Survey Committee, explained that the group’s prices index shot up to 51.3 per cent, a jump of 6.3 points from January, and well above estimates.
He added the sub-index moved into “increasing” territory after registering “decreasing” for four straight months.
Finally, German consumer prices, harmonised to facilitate comparability with EU data, rose more than anticipated in February, data by Destatis showed on Wednesday, indicating no easing in the stubborn price pressures and fanning European Central Bank (ECB) rate hike expectations.
The harmonised index of consumer prices (HICP) edged up slightly to 9.3 per cent in February from 9.2 per cent the previous month. The expected rate of price growth was nine per cent.
Month-on-month, the HICP grew by one per cent, faster than the forecast of 0.7 per cent. If core inflation remains persistently high in the currency bloc, the ECB would have no option but to continue hiking rates pushing forward future rate cuts.
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