UK house prices see lowest increase since January

GBP

Market movement was relatively limited yesterday due to the US bank holiday and quiet economic backdrop, and as a result Sterling remained range-bound without any significant breaks from current support or resistance levels.

One headwind, which Sterling continues to face in the wake of last week’s Bank of England interest rate decision, is investors’ weak appetite for the British currency. The latest Bloomberg MLIV pulse survey illustrates the concerns many respondents hold for the UK economy. The survey suggests that many are bearish on the pound with 80% of respondents signalling that they expect a recession within the next twelve months. Added to this, many respondents anticipate Sterling to struggle into year-end with almost three quarters of respondents suggesting that a move to the record low of 1.15 for GBP/USD was more likely than a rebound to 1.3500.

Property website Rightmove reported a 0.6% increase in UK house prices for June, lower than the 2.1% increase seen in May. Despite house prices rising, this was the lowest increase since January with the year on year rate falling to 9.7% from 10.2%.

Key announcements

12:15 – GBP – BoE Tenreyro’s Speech