UK house sales reached their highest level in more than two and-a-half years last month as confidence continued to return to the market, surveyors said today. The Royal Institution of Chartered Surveyors’ seasonally adjusted house price balance declined in the three months to January, signalling broadly stable prices. The number of mortgages on the market has increased by around a third since the Government launched a Funding for Lending scheme last August to unblock the housing market. Lenders have also been slashing their rates to some of their lowest-ever levels following the introduction of the initiative, which gives lenders access to cheap finance. In other related news, U.K. industrial production unexpectedly fell in January as the suspension of an oil platform in the North Sea lowered oil and gas output.
Meanwhile, Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. More than three years after revealing that Greece had misled its euro partners on the state of its finances, the nation remains reliant on loans from the euro area and the International Monetary Fund to pay pensions and wages. Policy makers gave Prime Minister Antonis Samaras two extra years until 2016 to meet budget-reduction targets after he forged a coalition government following two elections that jeopardized the country’s survival as a euro member.
On the FX markets, the US dollar held onto gains following Friday’s positive jobs data with EUR/USD pushing down to a low of $1.2978. In contrast to recent upbeat US data releases, Sterling remains under pressure as investors view the UK as susceptible to more weak economic data. A lack of support saw GBP/USD slip to $1.4863 yesterday, its lowest rate for almost three years.