UK House Prices Show Strong Increase
Figures from the Nationwide have shown that UK house prices are increasing at a strong pace and are now showing average house prices at the highest level since April 2008. While strong house prices are usually good for an economy there is a concern that prices are rising too fast and this was highlighted by Bank of England Governor Mark Carney at a speech yesterday. In fact in order to try and slow the growth of the UK housing market Carney has amended the Central Bank’s fudning for lending scheme by using this scheme purly for lending to small business rather than to banks to pass on via cheap loans and mortgages to private individuals. This is in complete contrast to the Governments help to buy scheme and shows that there is little harmony between the Central Bank and the government which does not bode well for the UK economy and therefore Sterling exchange rates. House prices are somewhere in the region of 6% below the all time high which we hit back in 2007 so there is still room for them to rise further before alarm bells really start to ring but it does seem that the powers that be have learnt from their previous mistakes and are trying to curb the housing market before it rises too far out of control.
Finally some positive news for Europe! Credit ratings agency Standard and Poors (S&P) have upgraded Spain’s economic outlook despite the problems the Spanish banks are currently facing. However, despite this upgrade it’s credit rating is still BBB- which is far from positive and at the same time as announcing this upgrade for Spain S&P downgraded the Netherlands rating from triple A to AA+ which means now only Germany, Luxembourg and Finland are left in the Eurozone with the triple A rating. The problems in Europe are mounting as is the pressure on the Euro and unless the single currency economy can turn around its current fortune 2014 could be a difficult year for many of the European nations.
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