Wednesday, October 03, 2012
Housing Market - " no pick up in the autumn" Bank of
Bank of England - Agents' summary of business conditions
- September 2012.
The housing market remained subdued. That was partly due to the
usual summer lull, with some contacts suggesting that activity may
have been postponed due to the Olympics.
But there was a concern that there would be no pickup in the
autumn, due to worries about the economy. Many banks were preparing
to make use of the Funding for Lending Scheme, but it was too soon
for it to have had any impact on demand. And credit conditions
continued to frustrate the aspirations of some would-be homeowners.
Numbers of first-time buyers had risen slightly, but buy-to-let
continued to account for a larger share of transactions than prior
to the recession. Further up the housing chain, activity was in
large part driven by the usual factors of debt, death and divorce.
Growing numbers of vendors were reported to be lowering their
asking prices to stimulate interest.
Business conditions summary
• Spending on consumer goods and services continued to grow at a
gradual pace. Promotions remained essential to support demand, with
households still focused on finding value for money.
• The housing market had been subdued. That was partly due to
the usual summer lull, with some contacts suggesting that activity
may have been postponed due to the Olympics.
• Investment intentions suggested that the level of investment
would be broadly unchanged over the coming twelve months.
• Export growth continued to slow, reflecting weakening
conditions throughout the euro area.
• Turnover in the business service sector was rising at a
gradual pace, as the volume of activity edged higher compared with
a year earlier.
• Manufacturing output growth had slowed further and was broadly
flat on a year earlier.
• The level of construction output continued to fall, due in
large part to reductions in work for the public sector, along with
some weather-related disruption to sites.
• The cost of borrowing was creeping upward as lenders passed on
higher funding costs, although many banks were preparing to make
use of the Funding for Lending Scheme.
• Employment intentions indicated that there would be little job
creation in the private sector over the coming six months.
• Businesses in growth industries were often at full capacity.
This was particularly evident among exporters, although there had
been some easing in constraints due to slowing foreign demand. In
areas of persistent weakness, by contrast, there was typically a
rather more significant degree of slack.
• Growth in labour costs per employee continued to moderate.
Contacts reported that there was relatively little upward pressure
on settlements from staff.
• Non-labour input cost inflation had slowed further. But energy
prices had begun to rise again recently, and prices of various
cereals and feedstock had also increased in anticipation of poor
harvests in both the United States and Europe.
• Output price inflation had declined, as easing cost pressures
fed through the supply chain and weak demand weighed on firms'
• The annual rate of consumer price inflation remained fairly
moderate, having fallen back in recent months.
Source & full report: