LONDON (Reuters) - A measure of British house prices edged down in October but there were signs that buyers and sellers were sitting on the sidelines at least until next month’s election, a survey published on Thursday showed. In the latest sign of weakness in the housing market against a backdrop of Brexit uncertainty, the Royal Institution of Chartered Surveyors (RICS) said its house price index slipped to -5 from -3 in September. That was a touch below the median forecast of -4 in a Reuters poll of economists. New sales instructions fell for a fourth month but less severely than in September when they tumbled at the fastest pace since Britain voted to leave the EU in a referendum in 2016, and there were signs they would remain weak. New buyer enquiries and agreed sales remained negative too. But near-term sales expectations improved and sales were expected to be broadly stable over the next three months in most of the country, RICS said. “The latest survey feedback continues t..
LONDON (Reuters) - Investors in British money manager Neil Woodford’s flagship fund could lose more than 1 billion pounds, four times more than had it reopened in December, according to estimates made by his firm before the shock closure of the fund. The 3 billion pound LF Woodford Equity Income Fund, backed by more than 300,000 investors, many of them small savers, failed because its exposure to hard-to-sell stocks meant it could not meet a flood of redemption requests after a phase of disappointing performance and asset revaluations. The move to wind down the fund in October following a four-and-a-half month suspension sent shockwaves through the City and marked a stunning reversal of fortune for Woodford, one of the UK’s most high profile investors. An impact assessment analysis seen by Reuters and dated Oct. 11, four days before administrator Link Fund Solutions suddenly announced it was closing the fund, shows savers facing losses of up to 36% on their investments, according to..
LONDON (Reuters) - Britain’s employers cut more jobs from July to September than in any quarter for four years, according to official data, which highlighted how the labour market is slowing as an election nears although the fall was smaller than economists forecast. Strong jobs growth has been a silver lining of the Brexit crisis for British workers as companies hired staff rather than make longer-term commitments to investment. The unemployment rate fell back to 3.8%, its lowest level since early 1975, the Office for National Statistics said. But falls in the number of people in work, vacancies and the pace of wage growth added to signs of slowdown which prompted two Bank of England officials to vote for an interest rate cut last week. “Granted, the employment data can be volatile, and the recent drop is being driven by part-time employment. But the drop ... could be an early sign of a sharp softening in labour demand, and a broader turning point in the labour market,” HSBC econo..
LONDON (Reuters) - Britain’s central bank looks set to sit out the global shift towards lower interest rates on Thursday, though investors will watch for any policymaker who might break ranks and vote to give the country’s slowing economy more help. With a snap election due on Dec. 12 and a new Brexit deadline on Jan. 31, Governor Mark Carney is unlikely to give an explicit steer on where interest rates are heading. “It’s all about nuance and emphasis,” Investec economist Philip Shaw said. Carney - who is due to step down at the end of January - was almost certain to acknowledge a weaker global and domestic outlook, but a concrete signal that a rate cut is coming looked improbable, he added. So far the BoE has resisted following the U.S. Federal Reserve and the European Central Bank by cutting its main interest rate in response to a global slowdown caused by the trade war between the United States and China. The outlook for Carney and his colleagues is clouded not only by the cont..
LONDON (Reuters) - British house prices rose at their slowest annual pace in six-and-a-half years in October when they inched up by 0.9%, mortgage lender Halifax said, the latest sign of how Brexit uncertainty is weighing on the housing market. Compared with September, prices fell by 0.1%, Halifax said on Thursday. Russell Galley, managing director at Halifax, said consumers were “erring on the side of caution” although low interest rates and wage growth were underpinning the market. “We remain unchanged from our view that activity levels and price growth will remain subdued while the UK navigates political and economic uncertainty,” he said. Shortly before the 2016 Brexit referendum, house prices were surging by 8-9% a year, under Halifax’s measure. Rival mortgage lender Nationwide said last week that house prices rose 0.4% in October compared with the same month last year, the 11th month in a row that annual price growth remained below 1% by its measure. The European Union agre..
LONDON (Reuters) - Two Bank of England officials unexpectedly voted to lower interest rates due to signs of a deeper economic slowdown, and others said they would consider a cut if global and Brexit headwinds did not lift. Below are comments from Mark Carney at a news conference after the BoE announcement: ON THE GLOBAL ECONOMY “It’s important to step back sometimes and not lose sight of the big picture. Globally that big picture has darkened.” ON A BREXIT DEAL “Now it’s become possible that the picture in the UK could change, with the recent UK-EU withdrawal agreement creating the prospects for a pick-up in UK growth. “The pace of that recovery will depend critically on the extent to which uncertainty over the future UK-EU trading relationship actually dissipates, and, to a much lesser degree, by how much the global economy actually picks up. “Both are assumed in the MPC’s latest projections, neither is assured.” ON BREXIT UNCERTAINTIES “As has been the case for some time Brexit..
LONDON (Reuters) - Two Bank of England officials unexpectedly voted to lower interest rates on Thursday to ward off an economic slowdown, and others including Governor Mark Carney said they would consider a cut if global and Brexit headwinds do not ease. Economists polled by Reuters had expected the BoE to vote unanimously to keep Bank Rate at 0.75%, and the announcement of the 7-2 split pushed sterling to a two-week low as market odds on a cut next year rose as high as 80%. To date, the BoE has resisted following the U.S. Federal Reserve and the European Central Bank in cutting its main interest rate, but Thursday’s Monetary Policy Report positions the BoE for a change in stance. Carney said the BoE’s central scenario was that a slowdown in global growth would stabilize and that Prime Minister Boris Johnson’s Brexit deal — which parliament has yet to approve — pointed the way to a reduction in Brexit uncertainty. If this scenario unfolds, the BoE would still be able to stick to it..
LONDON (Reuters) - Britain’s plan to raise the minimum wage to two-thirds of median earnings, taking it to 10.50 pounds an hour, was endorsed by an independent review on Monday that found setting a floor on pay had a negligible effect on job creation. Companies are now likely to see wage costs rise after next month’s snap national election whatever the outcome. Conservative Finance Minister Sajid Javid said in September he would increase the National Living Wage (NLW) to the new target by 2024, provided economic conditions allowed, and expand its reach to all workers over the age of 21, down from 25 now. The opposition Labour Party said it would raise the minimum wage to 10 pounds an hour immediately if it wins power. An independent review commissioned by the government from economics professor Arindrajit Dube of the University of Massachusetts Amherst examined the impact of minimum wages in Germany, the United States, Britain and other countries. “Based on the overall evidence - ..
LONDON (Reuters) - Asset managers must ensure effective liquidity management of their funds, even where investment decisions have been delegated to others, Britain’s Financial Conduct Authority said. The FCA is investigating the suspension in June of the now-closed flagship equity fund run by Neil Woodford, one of Britain’s highest-profile asset managers, which was unable to meet daily calls from investors for redemptions. “Good fund governance ensures the liquidity of your funds’ underlying assets is appropriately considered,” Nick Miller, FCA head of asset management, said in a letter to asset managers which was published on Monday. Such letters are sometimes read as a warning that enforcement action is the next step. For funds, liquidity refers to the ease of selling assets, critical for those that offer daily cashbacks to investors. Miller said asset managers should check if they are managing liquidity in their funds in line with the FCA’s best practice. “Open ended” funds com..
LONDON (Reuters) - Britain’s state spending will head back to levels not seen since the 1970s if the two main political parties in the Dec. 12 election make good on their promises, a think-tank said on Monday, warning that taxes will have to rise too. After a decade of tight controls on the budget to fix the damage wrought by the financial crisis, Prime Minister Boris Johnson’s ruling Conservative Party and the opposition Labour Party are both wooing voters with spending plans. “The shared commitments to ending austerity, reversing elements of it, and big infrastructure plans mean Britain could be heading back to a 1970s-sized state,” Matt Whittaker, deputy chief executive at the Resolution Foundation, said in a report. Finance minister Sajid Javid announced in September the biggest funding increases for public services in 15 years, and says he wants to spend more on infrastructure too, echoing the plans of left-wing Labour. “The fact is that whatever promises are made over the cou..