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Halifax shows continued slide in house prices…but the real market test comes in the New Year

Halifax shows continued slide in house prices…but the real market test comes in the New Year

The Halifax house price index crept down today and appears to be on a path of slow decline, which is broadly in line with most other house price indicators. And as we can see from the graph transactions remain subdued and mortgage approvals are also on a gentle downward slide. But while the current slide in the market may be unsettling, it will be the next few months that will prove particularly nail biting for those whose fortunes are pinned…

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Inflation – a reason to be cheerful or a cause for concern?

Inflation – a reason to be cheerful or a cause for concern?

The rate of inflation is important to construction at present, especially to those engaged in the housing market that might be wary of high inflation rates prompting increases in interest rates or deflation prompting prolonged falls in house prices. But it seems to me that people fall in reasonable proportions into three camps, those who fret about inflation rising, those who remain pretty relaxed and those who fret about deflation. So here is one graph that oddly might satisfy all sets of proclivities. There…

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Some comfort for house builders as inflation fears ease

Some comfort for house builders as inflation fears ease

The latest set of inflation figures showing a fall in the headline rate of the CPI index will provide a good degree of comfort to the interest rate setters at the Bank of England’s Monetary Policy Committee. And in turn this should provide some relief to those house builders who harbour fears about a rise in interest rates. At 3.4% the headline rate remains well above the 2% target and as such remains unsettling for those who fear that this…

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Latest construction forecasts suggest there is more to fear than hope for

Latest construction forecasts suggest there is more to fear than hope for

The latest round of forecasting by construction experts paints a picture little changed from three months ago with little hope of significant growth, much uncertainty and the risks to growth heavily weighted on the down side. The general pattern they expect can be seen from the graph (right). It shows that after the biggest recorded annual fall since comparable records began in 1955 the forecasters expect a continued slide this year. There is some variation in views on this, with…

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Reasons to be careful – December’s higher than expected inflation

Reasons to be careful – December’s higher than expected inflation

Consumer Price Inflation at 2.9% in December and up from 1.9% a month earlier… mmm… that’s not what the experts expected. Not by a long way. This morning’s story from Reuters published ahead of the inflation figures had its poll of experts plumping for inflation at 2.6%. No doubt there will be a lot of post-announcement rationalisation about the figures from economist, but in truth the City and economists at large have consistently underplayed the strength of inflation in their…

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Are expectations of inflation too low?

Are expectations of inflation too low?

Inflation is now on the way up. That was to be expected. As Mervyn King, Governor of the Bank of England, keeps reminding us, we should expect inflation to be very volatile for some while. But, is it me or do the forecasts for inflation reaching a mini-peak at about 3% in the early part of next year seem to be a little timid? The reason I am a bit unsettled is that if expectations for inflation prove to be…

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Is this deflation I see before me? Why prices are rising faster than the inflation rate

Is this deflation I see before me? Why prices are rising faster than the inflation rate

I am not sure about you, but I sometimes have to go to the back numbers to make sense of the statistics that get thrown at me. I have been for some months a bit curious as to why the brightest brains (well some seriously well paid experts) among the UK economists have consistently been wrong in their prediction of inflation, each time overstating the fall in the headline figure. Again this month, they expected the Consumer Price Index to…

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