Proactive Investors -
- FTSE 100 down 19 points at 7,660.
- Nationwide to buy Virgin Money (LON:VMUK).
- House prices up for fifth consecutive month.
UK housing market ‘coming back to life’ - analyst
A fifth consecutive month of rising house prices in the UK demonstrates that the market “is coming back to life,” commentators have said.
“Buyers that were put off by higher rates are slowly returning in light of lower fixed rate offerings and easing inflation,” as per Aaron Milburn, director at credit firm Pepper Advantage.
His comments come after Halifax reported a 0.4% rise in house prices between January and February on Thursday.
This represented a £1,091 jump to £291,699, with prices increasing by 1.7% on an annual basis.
However, prices had climbed to 2.3% in the year to January, meaning the rate of increase had slowed.
“The drop in growth reflects the tenuous nature of this recovery,” Milburn said, “much depends on the Bank of England's decision later this month”.
Here's a recap of today's big stories
The FTSE 100 dipped early on after a bullish post-budget performance on Wednesday.
Grabbing headlines was Nationwide, which unveiled a deal to take over Virgin Money in a move which would create a group with combined assets of £366.3 billion.
Elsewhere, Aviva (LON:AV) shares jumped in early trading after the insurer unveiled a 9% increase in full-year pre-tax profit to £1.47 billion and hiked its dividend by 8% to 33.4p.
ITV (LON:ITV) also enjoyed a strong start, after announcing solid growth in its production and streaming wings had largely offset a wider downturn in advertising spend last year.
And finally, Halifax said 2024 had so far brought relative stability for the housing market, as the lender reported prices had climbed by 1.7% in February.
UK could face £60 billion fiscal black hole, Citi analysts warn
Britain’s growth projections could be overly optimistic for the year ahead as the likes of supply shocks are left unaccounted for, analysts have said.
Though the Office for Budget Responsibility forecast UK gross domestic product (GDP) to climb by 0.8% for the year, Citi analysts said on Tuesday that a more realistic figure would be around 5%.
Indeed, Citi noted the 8% forecast would see UK GDP grow far quicker than has been seen so far since the pandemic.
“We think post-Covid fiscal headwinds are only just beginning,” the bank said in a note, as it warned further “supply shocks” were likely in the future.
According to the bank, the OBR’s fiscal spending forecast is short by about £30 billion to £35 billion, while cuts unveiled in Wednesday’s budget are also likely “undeliverable”.
The government will have to spend in the region of £20 billion to £25 billion extra than is planned therefore, the bank said, taking the UK’s so-called fiscal black hole to between £50 billion and £60 billion.