UK Inflation – GBP Exchange Rates
Inflation figures for the UK have been confirmed as coming out at 0.1% for the month on month figure which is well below last months number and also below the anticipated levels which has resulted in Sterling exchange rates falling significantly. These negative figures have, for the time being, quashed any thoughts that we may be increasing interest rates any time soon as you would theoretically expect to need high levels of inflation to warrant a rate hike on top of the need for lower unemployment as the Bank of England (BoE) have already commented. This news will also bring sharply into focus the quarterly inflation report tomorrow morning. With the European Central Bank (ECB) cutting interest rates due to their falling inflation levels the chance of an interest rate hike is looking likely to happen even further in the future which could damage Sterling exchange rates. To find out more about UK inflation, Sterling exchange rates and the market outlook please contact us today on 0800 328 5884 or alternatively email me on email@example.com
UK Housing Market Strengthening
According to the Royal Institute of Chartered Surveyors (RICS) the UK housing market is strengthening thanks to a large increase in demand from buyers. In the statement from RICS they stated that the number of potential buyers significantly outweighs the number of properties for sale and it is this disproportion that has lead to the average UK house price rising and expected to rise further. Should demand continue to outsrip supply of houses for sale we could be at risk of seeing house prices rise too quickly and unsustainably. While I have written on many occassions that a strong housing market is good news for the UK economy and Sterling exchange rates, should house prices in the UK rise too quickly and too high we could be at risk from another housing bubble which can actually cause more damage than good should that bubble burst. This is why RICS called for this imbalance to be addressed urgently. The governments Help to Buy scheme is apparently driving interest and with new house price figures from the Office of National Statistics later today the housing market may continue to be a major driver for Sterling interest rates and the theory of rising house prices being good news for Sterling may not hold true if concerns surrounding prices rising too fast are confirmed.