Home > Resource Hub > Daily Market News > UK House prices dip more than forecast

UK House prices dip more than forecast

UK House prices dip more than forecast

British house prices fell faster than expected in January, partly because bad weather discouraged viewings, but prices are likely to pick up later in the year, a survey showed on Tuesday. The Royal Institution of Chartered Surveyors’ (RICS) seasonally adjusted house price balance dropped to -4 in January from a slightly downwardly revised -1 in December. Overall in Britain, house sales rose last month, supported by falling mortgage interest rates, it added. Bank of England data released on Monday showed sharp falls in fixed mortgage rates in January, likely helped by the central bank’s Funding for Lending Scheme, which provides cheap funding to banks to encourage them to lend.

In other news, Eurozone finance ministers met in Brussels yesterday to discuss aid to Cyprus and Greece. Events last week signalled the three year crisis is not over as the meeting takes place against a backdrop of a tightening election contest in Italy, a political scandal in Spain and Draghi’s recent comments suggesting euro strength could impact on economic growth, all of which disrupted calm in the markets.

Meanwhile in the US, President Barack Obama delivers his State of the Union speech Tuesday night; he presides over an economy much healthier than the one he inherited four years ago. Yet growth remains slow and unemployment high. In early 2009, the U.S. economy was in the midst of a full-blown panic sparked by the collapse of a housing bubble. Though companies are now hiring modestly but steadily. Still, unemployment remains far higher. But home prices are finally rebounding as sales and housing starts have recovered. And Americans are buying cars again.

On the FX Markets, GBP underperformed its peers on Monday, as market participants looked forward to the release of the Quarterly Inflation Report later on this week, with reports over the weekend suggesting that the BoE is more likely than not to cut growth projections. The major pair was also dragged lower by touted offers from Middle Eastern and leveraged names. Weaker GBP and risks associated with looming elections in Italy buoyed shorted-dated EUR/GBP implied vols. In terms of technical levels, supports are seen at 1.5631, the August 10th low at 1.5578 and then at 1.5550. On the other hand, resistance levels are seen at the 10DMA line at 1.5740, the 21MDA line at 1.5819 and then at the 38% retracement of the January/February sell-off at 1.5918.

Currency UK will offer you the best exchange rates available and ensure that your subsequent international transfers are handled as quickly and as efficiently as possible.

Do you want to earn some extra money? Then you can profit from our affiliate programby referring a company or friend that may benefit from our services and earn a commission in return. Contact us now on +44 (0)20 7738 0777 or click here.

Share this case study
Set yourself up in minutes, make payments the same day: it’s free, easy and without obligation.