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| Bank of England deputy opposes rate hike, as UK house prices rebound - business live | Bank of England deputy opposes rate hike, as UK house prices rebound - business live |
| (35 minutes later) | |
| 8.56am BST | |
| 08:56 | |
| Sir Jon Cunliffe has “drawn the battle lines” for August’s monetary policy committee meeting by arguing against an early interest rate rise, says Bloomberg’s Lucy Meakin. | |
| Here’s a flavour of her piece: | |
| While some members of the BOE’s rate-setting committee have argued that consumer-price inflation of 2.9 percent means an increase in bank rate is required imminently, Cunliffe said that has been driven by the pound’s depreciation since the Brexit referendum and that wage pressures have remained low. | |
| Inflation above the 2 percent target is “not a comfortable place,” Cunliffe said in an interview on BBC radio. However, “we do have to look at what’s happening with domestic inflation pressures and on the data we have at the moment, that gives us a bit of time to see how this evolves.” | |
| #BOE's Cunliffe says domestic price pressures buy time on rates https://t.co/OgPhIGSGEc via @lucy_meakin pic.twitter.com/L5VTmX9QZM | |
| 8.33am BST | |
| 08:33 | |
| London house price growth hits five-year low | |
| London house price are now rising at the slowest rate since 2012, says Nationwide. | |
| This chart shows how house prices in the UK capital have come off the boil, having outpaced the rest of the country for several years. | |
| London house prices barely rising, weakest annual growth since 2012 - Nationwide pic.twitter.com/yUQ4TMpTWD | |
| It’s a remarkable reversal, says Jonathan Hopper, managing director of Garrington Property Finders: | |
| “First came Britain’s electoral map, then its property map. June has seen them both redrawn. | |
| “For London’s house prices to be growing at the second slowest rate in the country would have been unthinkable for much of the past decade. | |
| “Instead growth is now spread much more evenly across the country, with the market fragmenting into a patchwork of smaller hotspots and coldspots. | |
| Updated | |
| at 8.36am BST | |
| 8.28am BST | |
| 08:28 | |
| House prices rebound: What the experts say | |
| Jeremy Leaf, north London estate agent, agrees that the rebound in UK house prices in June is “a little surprising”. | |
| He says that current low interest rates helped to push prices up by 1.1% last month, as did is a lack of supply: | |
| ‘However, looking forward the shortage of supply and lack of housebuilding are certainly two of the factors supporting the market. | |
| These will need to improve if we are going to see more sustainable growth in housing transactions. | |
| Neal Hudson of Residential Analysts points out that the housing market had a weak start to the year. | |
| Nationwide shows stronger house price growth in June after weak springMy current estimate for the change in house prices over 2017 is 1.9% pic.twitter.com/fyywsfrrqK | |
| Property advisor Pete Wargent agrees that low availability of housing stock is a key factory: | |
| Odd-looking jump in UK house prices, with stock levels low; but other signals suggesting moderation (Nationwide) pic.twitter.com/gcyM26FQUp | |
| Lucy Pendleton, Founder Director of independent estate agents James Pendleton, warns that the housing market faces four threats: | |
| A gentle slide in prices could continue but it’s got less to do with Brexit and more to do with four factors that can be the Four Horsemen of the Apocalypse for markets - inflation, consumer credit, wage growth and mortgage activity - all of which have been dragging their heels recently. | |
| “In May, mortgage approvals hit an eight-month low, wage growth slumped, inflation rose unexpectedly to 2.9%, a near four-year high, and consumer credit also fell dramatically. | |
| “This combination of factors is not fertile soil for house price growth. What I expect to see from those buyers and sellers who don’t have to come to market right away, is the classic wait-and-see wobble as vendors put off selling, and buyers hold out for better deals. | |
| “It’s this wait-and-see approach that can cause short-term falls to become a bit of a self-fulfilling prophecy but solid demand, particularly in urban areas, will cushion any retreat in prices.” | |
| 8.24am BST | 8.24am BST |
| 08:24 | 08:24 |
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| 8.09am BST | 8.09am BST |
| 08:09 | 08:09 |
| UK house prices rebound in June | UK house prices rebound in June |
| Now here’s a surprise.... UK house prices have rebounded quite strongly this month, despite a slowdown in London. | Now here’s a surprise.... UK house prices have rebounded quite strongly this month, despite a slowdown in London. |
| Prices rose by 1.1% in June, according to the latest figures from Nationwide, reversing three months of falls. That means the average house costs 3.1% more than a year ago, at £211,301. | Prices rose by 1.1% in June, according to the latest figures from Nationwide, reversing three months of falls. That means the average house costs 3.1% more than a year ago, at £211,301. |
| But Robert Gardner, Nationwide’s Chief Economist, remains caution, saying: | But Robert Gardner, Nationwide’s Chief Economist, remains caution, saying: |
| “The annual rate of house price growth, which gives a better sense of the underlying trend, continues to point to modest price gains. Annual house price growth edged up to 3.1% from 2.1% in May. | “The annual rate of house price growth, which gives a better sense of the underlying trend, continues to point to modest price gains. Annual house price growth edged up to 3.1% from 2.1% in May. |
| In effect, after two sluggish months, annual price growth has returned to the 3-6% range that had been prevailing since early 2015. | In effect, after two sluggish months, annual price growth has returned to the 3-6% range that had been prevailing since early 2015. |
| The figures also show some interesting changes at the regional level. In London, prices have only risen by 1.2% in the last year, while East Anglia has enjoyed 5% house price inflation. | The figures also show some interesting changes at the regional level. In London, prices have only risen by 1.2% in the last year, while East Anglia has enjoyed 5% house price inflation. |
| 8.00am BST | 8.00am BST |
| 08:00 | 08:00 |
| Jon Cunliffe also admitted that the recent surge in inflation, to 2.9%, means the Bank of England isn’t in a “comfortable place” right now. | Jon Cunliffe also admitted that the recent surge in inflation, to 2.9%, means the Bank of England isn’t in a “comfortable place” right now. |
| Bank of England Cunliffe says the MPC is not "in a comfortable place" as civil war rages on the MPC with a clear split in opinions forming. pic.twitter.com/O5IB7UO1WL | Bank of England Cunliffe says the MPC is not "in a comfortable place" as civil war rages on the MPC with a clear split in opinions forming. pic.twitter.com/O5IB7UO1WL |
| 7.56am BST | 7.56am BST |
| 07:56 | 07:56 |
| Cunliffe: Now's not the time to raise rates | Cunliffe: Now's not the time to raise rates |
| The split at the Bank of England over when to raise interest rates has widened further this morning, after deputy governor Sir Jon Cunliffe waded in. | The split at the Bank of England over when to raise interest rates has widened further this morning, after deputy governor Sir Jon Cunliffe waded in. |
| Cunliffe has come down firmly in the ‘don’t raise rates yet’ camp, arguing that there’s simply not enough pressure to justify a rate rise. | Cunliffe has come down firmly in the ‘don’t raise rates yet’ camp, arguing that there’s simply not enough pressure to justify a rate rise. |
| With households facing a wage squeeze, Cunliffe argues that inflicting higher borrowing costs would just make the situation worse. | With households facing a wage squeeze, Cunliffe argues that inflicting higher borrowing costs would just make the situation worse. |
| This puts Cunliffe in opposition to at least two other policymakers, and means he’s firmly behind his boss, governor Mark Carney. | This puts Cunliffe in opposition to at least two other policymakers, and means he’s firmly behind his boss, governor Mark Carney. |
| Cunliffe told BBC Radio that: | Cunliffe told BBC Radio that: |
| “[Consumer spending] is slowing as households’ real incomes are squeezed by higher inflation, we expect some of that slowing to be offset by growth in business investment, growth in exports. And I want to see how that plays out. | “[Consumer spending] is slowing as households’ real incomes are squeezed by higher inflation, we expect some of that slowing to be offset by growth in business investment, growth in exports. And I want to see how that plays out. |
| (We) do have to look at what’s happening to domestic inflation pressure, and I think that on the data we have at the moment, gives us a bit of time to see how this evolves.” | (We) do have to look at what’s happening to domestic inflation pressure, and I think that on the data we have at the moment, gives us a bit of time to see how this evolves.” |
| All sensible-sounding stuff. | All sensible-sounding stuff. |
| But just a week ago, chief economist Andy Haldane shocked the markets by revealing that he expects to vote for a rate hike later this year..... Two other policymakers, Ian McCafferty and Michael Saunders, voted to raise rates in June (along with the departing Kristin Forbes). | But just a week ago, chief economist Andy Haldane shocked the markets by revealing that he expects to vote for a rate hike later this year..... Two other policymakers, Ian McCafferty and Michael Saunders, voted to raise rates in June (along with the departing Kristin Forbes). |
| So the next meeting, in August, could be a real humdinger as the hawks and doves trade blows over the state of the UK economy, the inflation threat, and the risks posed by Brexit. | So the next meeting, in August, could be a real humdinger as the hawks and doves trade blows over the state of the UK economy, the inflation threat, and the risks posed by Brexit. |
| Updated | Updated |
| at 7.58am BST | at 7.58am BST |
| 7.30am BST | 7.30am BST |
| 07:30 | 07:30 |
| The agenda: Central bankers in the spotlight again | The agenda: Central bankers in the spotlight again |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| Central bankers are commanding our attention again today. Last night, Federal Reserve chair Janet Yellen gave a rare hostage to fortune by predicting that we’ll probably live out our days without seeing a repeat of the 2008 crisis. | Central bankers are commanding our attention again today. Last night, Federal Reserve chair Janet Yellen gave a rare hostage to fortune by predicting that we’ll probably live out our days without seeing a repeat of the 2008 crisis. |
| Yellen told an audience in London that: | Yellen told an audience in London that: |
| “Would I say there will never, ever be another financial crisis? | “Would I say there will never, ever be another financial crisis? |
| “You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be.” | “You know probably that would be going too far but I do think we’re much safer and I hope that it will not be in our lifetimes and I don’t believe it will be.” |
| Fed's Yellen expects no new financial crisis in 'our lifetimes' https://t.co/Jj1uL7sNVM pic.twitter.com/IRKVn2IedK | Fed's Yellen expects no new financial crisis in 'our lifetimes' https://t.co/Jj1uL7sNVM pic.twitter.com/IRKVn2IedK |
| But do other central bankers agree? We may find out later today, as the European Central Bank holds its annual Forum in Portugal’s Sintra. | But do other central bankers agree? We may find out later today, as the European Central Bank holds its annual Forum in Portugal’s Sintra. |
| Many of the top stars of monetary policy are attending, including ECB president Mario Draghi, the Bank of England’s Mark Carney, Japan’s Haruhiko Kuroda and Stephen Poloz of the Bank of Canada. | Many of the top stars of monetary policy are attending, including ECB president Mario Draghi, the Bank of England’s Mark Carney, Japan’s Haruhiko Kuroda and Stephen Poloz of the Bank of Canada. |
| Yesterday, the Bank of England ordered UK banks to hold more capital in case of a consumer debt crisis. Today, we find out how British house prices are holding up in the face of Brexit uncertainty. | Yesterday, the Bank of England ordered UK banks to hold more capital in case of a consumer debt crisis. Today, we find out how British house prices are holding up in the face of Brexit uncertainty. |
| We’re also getting new US trade figures. | We’re also getting new US trade figures. |
| On the corporate front, electricals retailer Dixons Carphone and packaging giant Bunzl are reporting financial results. | On the corporate front, electricals retailer Dixons Carphone and packaging giant Bunzl are reporting financial results. |
| And Britain’s financial watchdog, the FCA, is releasing a report into UK fund management industry. We’ll dig through the key points. | And Britain’s financial watchdog, the FCA, is releasing a report into UK fund management industry. We’ll dig through the key points. |
| The agenda: | The agenda: |
| 7am BST: Nationwide house prices (details to come shortly!) | 7am BST: Nationwide house prices (details to come shortly!) |
| 1.30pm BST: US trade figures for May | 1.30pm BST: US trade figures for May |
| 2.30pm: BST: Central bank chiefs panel with Mark Carney, Mario Draghi, Haruhiko Kuroda and Stephen Poloz in Sintra | 2.30pm: BST: Central bank chiefs panel with Mark Carney, Mario Draghi, Haruhiko Kuroda and Stephen Poloz in Sintra |
| Updated | Updated |
| at 7.58am BST | at 7.58am BST |