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UK House Prices, Bank of Canada, Eurozone Retail Sales, and Today’s Events

UK average property prices fell in November, expectations met by the Bank of Canada, lower than expected Eurozone retail sales, and what's happening today.

UK House Price Index

According to the Halifax house price index, average property prices fell 1% on a year-on-year basis over the UK in November. This now brings the average house price in the UK to £283,615. The was a strong regional divide with property prices in Northern Ireland rising 2.8% while prices in London fell 3.8%. South East England experienced the greatest drop, falling 5.7% on an annualised basis. On a month-on-month basis house prices rose 0.5%, representing the second monthly rise in a row, which in cash terms this equates to £1,394.

Commenting on the data, the Director of Halifax Mortgages, Kim Kinnaird, wrote that “the resilience seen in house prices during 2023 continues to be underpinned by a shortage of properties available, rather than any significant strengthening of buyer demand. That said, recent figures for mortgage approvals suggest a slight uptick in activity levels, which is likely as a result of an improving picture on affordability for homebuyers.”

On the topic of house building, according to the BBC, in both 2021-22 and 2022-23 the number for net additional dwellings was just under 235,000 a year. This marked a marginal increase from the 217,754 dwellings built in 2020-21 but is still a miss on the 300,000 a year committed by the Conservative Party in their 2019 manifesto.

Bank of Canada Hold

Yesterday, the Bank of Canada met market expectations in leaving rates unchanged at 5%. This marked the third consecutive hold, and came as Ottawa saw inflation fall from 3.8% in September to 3.1% in October. The hold further raised convictions that the BoC have reached their terminal rate. Policy makers are also forecasting inflation to hover around 3.5% throughout the middle of next year.

The Bank of Canada’s press release stated that “Higher interest rates are clearly restraining spending: consumption growth in the last two quarters was close to zero, and business investment has been volatile but essentially flat over the past year.”

Regarding growth, the central bank noted that real GDP fell 1.1% over Q3 and stated that “The slowdown in the economy is reducing inflationary pressures in a broadening range of goods and services prices”.

Eurozone Retail Sales

Yesterday morning, Eurozone retail sales came in marginally lower than expected after seeing a 1.2% contraction over October on an annualised basis. Retail sales on a month-on-month basis grew 0.1% however, which despite coming in marginally softer-than-expected, represented a break from the four previous monthly declines. Online sales also saw significant growth, rising 2.2%.

The data also indicated that there was a significant disparity in retail sales across the eurozone. For example, in the Netherland’s retail sales grew 2.4% and 1.1% in Germany, while retail sales fell 1% in France.

Today’s Events

Today’s main events include Eurozone employment change figures released at 10:00. This comes at the same time as Eurozone GDP figures for Q3 are released, though this is a final reading. Focus will then turn to the US with the release of initial jobless claims at 1330. Japanese growth figures for Q3 is then released at 23:50 where the general market consensus is forecasting a contractionary print of -2.1%.

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