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Thursday, Sep 29, 2022

Two indicators slowdown already under way after Bank of England warns of 15-month recession

Two indicators slowdown already under way after Bank of England warns of 15-month recession

Just a day after the Bank of England warned of a 15-month recession, there are signs in housing and recruitment that the slowdown is already well under way.
Figures out on Friday showed that house prices fell in July (in monthly terms) for the first time in more than a year, with warnings that the market is likely to weaken further following the bank's hiking of interest rates from 1.25% to 1.75%.

The bank rate is now at its highest level since 2008, as the bank tries to fight inflation which is running at 9.4% - well above its 2% target - and is forecast to pass 13% later this year.

It comes as households face record-breaking increases in energy bills, and mortgage lender Halifax said that this rapidly-spiralling cost of living would have its effect on the market, as buyers look to rein in spending.

In July the average house price stood at £293,221 - down £365 or 0.1% from the previous month's record high. In annual terms, however, prices still rose by 11.8%, compared to the 12.5% seen in June.

Russell Galley, Halifax managing director, said: "House prices are likely to come under more pressure as those market tailwinds fade further and the headwinds of rising interest rates and increased living costs take a firmer hold.

"Therefore a slowing of annual house price inflation still seems the most likely scenario."
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