Housing prices in the U.K. surged in the April-June quarter as growing confidence and economy fanned demand for property.
Home values accelerated 2.3 percent in the second quarter to a median of 183,462 pounds ($314,200), reported Halifax, the mortgage unit of Lloyds Banking Group. Though prices declined 0.6 percent from May, they surged 4 percent then, the strongest pace since October 2002. The prices grew 9.4 percent in June from a year ago.
“Housing demand continues to be supported by an economic recovery that is gathering pace,” Stephen Noakes, the mortgages director at Halifax said in a statement, according to Bloomberg News.
Fears that Britain’s property market may overheat pushed the Bank of England Governor Mark Carney to roll out policies in June that aim to reduce risky lending and curb buildup of unsustainable levels of consumer debt.
In a separate report, China’s inflation fell more than expected in June, signaling that the government may roll out further stimulus to boost growth. The consumer price index (CPI) fell to 2.3 percent in June from a year ago, compared with 2.5 percent in May, reported the National Bureau of Statistics on Wednesday. Analysts polled by Reuters had expected a reading of 2.4 percent.
The producer price index (PPI) plunged for the 28th consecutive month, declining 1.1 percent against market forecast of a 1 percent drop, indicating that domestic demand is still sluggish.
“The weak inflation data leaves more scope for Beijing to step up use of targeted measures and even opens the opportunity window for blanket easing policy, such as an interest rate cut, to support economic growth,” Wang Jin, a Shanghai-based analyst at Guotai Junan Securities told Reuters.
Though market consensus is that the government will announce new stimulus measures in order to push the economy to attain the 7.5 percent growth rate in 2015, policymakers are hesitant to roll out a massive stimulus due to fears of spiralling inflation and debt. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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