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FTSE 100 Live: Stock markets weaker, house market ‘losing momentum’

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Average house price up £50,000 in two years

House prices lifted by 0.8% month-on-month in August, Nationwide said today as it reported a softening in annual growth to 10% from 11% in July. The average price stood at £273,751, which represents a near £50,000 increase over two years.

A shortage of housing stock has meant that price growth has remained firm, despite the impact of inflation and higher borrowing costs.

Nationwide chief economist Robert Gardner added: ““There are signs that the housing market is losing some momentum, with surveyors reporting fewer new buyer enquiries in recent months and the number of mortgage approvals for house purchases falling below pre-pandemic levels.”

He expects the market to slow further as pressure on household budgets intensifies in the coming quarters.

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FTSE 100 weakens, pound below $1.16

The new month is continuing where the last one left off, with CMC Markets forecasting the FTSE 100 index will decline 40 points to 7,244.

London’s top flight fell by 1.9% during August, but the damage caused by the deteriorating economic outlook was greater for the FTSE 250 index after a decline of 5.5%.

Stock market sentiment has weakened since last Friday’s Jackson Hole speech by Federal Reserve chair Jerome Powell, in which he highlighted the need for a “restrictive policy stance” through higher interest rates for some time.

US stock markets have since fallen for four sessions in a row, with the Dow Jones Industrial Average down by another 0.9% last night.

Demand fears caused by the economic outlook and the latest Covid restrictions in China have left Brent crude at $95 a barrel, compared with $105 on Monday.

And the flight to the safe haven dollar has continued, with the pound now below $1.16 despite the prospect of another big interest rate rise by the Bank of England this month. Capital Economics warned yesterday sterling is heading for a record low of $1.05.

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