IMF Upwardly Revise Global Growth But Concerns Remain

The Nationwide UK house price index has fallen at its fastest annual rate in 14 years as the market continues to try to navigate rising interest rates. The data indicated that UK house prices slipped 3.8% between July 2022 and July 2023 with the average house price also falling some 4.5% from their recent peak of August 2022. This means that the average value of a house in the UK is now £260,828 as the costs of mortgages continue to appreciate. For example, this week has seen the average five-year fixed rate tick up to some 6.37% while the average two year-rate has risen to 6.85%. The rising costs of mortgages continues to weigh on prospective buyers, which has no doubt fed into the lower number of property transactions (which have fallen by about 14% between June 2022 and June 2023).

With the rising cost of mortgages being the key topic of conversation, Nationwide’s Chief Economist Robert Gardner said that “a prospective buyer, earning the average wage and looking to buy the typical first-time buyer property with a 20% deposit, would see monthly mortgage payments account for 43% of their take home pay (assuming a 6% mortgage rate). This is up from 32% a year ago and well above the long-run average of 29%”. Gardener also noted that with a 10% deposit on a house equating to 55% of gross annual average income, entry requirements remain challenging. All eyes now turn to the BoE’s interest rate decision tomorrow afternoon and the impact that any rate hike would have on average mortgage rates and the property market more generally.

Former President Donald Trump has been indicted in Washington after federal charges were put against him in the relation to the 2020 presidential election. Presently, Trump has been charged with conspiracy to: defraud the US, obstruct an official proceeding, obstruction of and attempt to obstruct an official proceeding, as well as conspiracy against the right to vote and have that vote counted. All eyes now turn to Washington to watch these developments unfold as well as see the impact that it will have on his election bid.

US ISM Manufacturing PMIs came in at 46.4pts for July yesterday, marking the ninth consecutive monthly contraction. This also came in softer-than-expected missing expectations of a 46.8pt print. The weak figure comes as new orders, production and inventories all contracted (though at a slower pace than last month).