UK house price slowdown; China growth beats forecasts - as it happened
Rolling coverage of the latest economic and financial news, as UK house price slowdown spreads from London to the South East
- Breaking: House prices falling in London and South East
- Full story: UK-wide house price growth hits six-year low
- Prices falling since last August
Earlier:
5.28pm BST
Finally, London's stock market has ended an uneventful session up just 1 point, at 7,471.
Packaging and transport firm Bunzl (rarely the most exciting Footsie constituent) had a more volatile day, plunging over 12% by the close.
The FTSE 100 underperformed the rest of Europe as the mining sector is holding the London equity benchmark back. The DAX and the CAC 40 have hit fresh six month highs as traders latched onto the stronger-than-expected growth figures from China. The Chinese economy grew by 6.4% in the first-quarter, topping the 6.3% forecast. Industrial production, retail sales and fixed asset investment all improved on the month, but the figures might not be as good as initially thought. State-owned investment compensated for lower private investment, and big ticket retail sales items like cars declined.
3.51pm BST
Business leaders are putting pressure on the authorities to take a tough line with the Extinction Rebellion protests, which have disrupted travel in the capital this week.
"West End businesses fully support the right to protest, but this is causing significant damage to our area."
In the last couple of days we've seen an average 25% drop in spend. It was 12m [lost] yesterday, obviously there's disruption today.
The impact is customers perhaps decide not to come [to the West End] over the Easter Weekend. This could go into the hundreds of millions of pounds if we don't get this and try to open up Oxford Circus and Marble Arch pretty quickly.
Related: Mark Carney tells global banks they cannot ignore climate change dangers
3.15pm BST
Over in New York, tech stocks are rising as New York traders welcome the stronger-than-expected growth figures from China overnight.
This has sent the Nasdaq 100 index of top US technology companies to a new all-time high. They should benefit if global growth is more resilient than expected.
2.47pm BST
In other trade news, the European Union has picked the US products it could hit with new tariffs, in a row over subsidies given to airline maker Boeing.
The list covers $20bn of imports into Europe each year, and hundreds of different item. It includes frozen fish, fresh truffles, dried fruits, vegetable fats, wine, vodka, handbags, bicycle parts and video game consoles.
EU-US TRADE FRICTION UPDATE: Brussels releases list with $20 billion worth of U.S. products that it wants to hit with tariffs in retaliation for unlawful Boeing subsidies. List includes frozen fish, citrus fruits and ketchup. Check it out here: https://t.co/lbGjLkmQ2n
2.38pm BST
Some reaction to the US trade data:
For the second straight month, the trade deficit fell in February due to an increase in exports of US-made aircraft, cars and medicine.
The trade deficit with China decreased markedly in February, with exports up 18% and imports down 20%, the Commerce Dept reports.
U.S. trade deficit fell 3.4% in February to $49.4B, marking smallest gap in eight months. Higher exports of autos and airplanes do the trick, but the recent downward trend appears to stem from one-off events that probably aren't sustainable. https://t.co/iI44aqyxgw pic.twitter.com/oghnr14rWh
2.03pm BST
Newsflash: America's trade deficit has fallen to an eight-month low, thanks to a surge in exports to China.
The gap between US imports and exports fell to $49.4bn in February, down from $51.1bn in January. That's an eight-month low.
February US trade data are out. The monthly trade deficit is lower than expected at $49.4bn and the politically-sensitive deficit with China narrows to $30.1bn. Zero market impact as investors expect a trade deal between US&China. pic.twitter.com/f8lno0DO6x
US Feb Trade Balance: soybean exports increased to $1.4 billion or 15.4% which is due in part to gradual unwinding of the US-China trade spat.
1.40pm BST
If you're just tuning in, here's our news story on the UK house prices slowdown, and March's inflation data:
House prices across Britain have increased at their slowest rate for more than six years, with London experiencing its biggest slump in a decade as Brexit concerns drag on growth.
The Office for National Statistics said average house prices in the UK rose by 0.6% in the year to February, the lowest rate of growth since September 2012, and down from a rate of 1.7% in January.
Related: House prices rise at slowest rate in six years as Brexit damps growth
1.27pm BST
Take note, potential house-buyers.
Howard Archer, chief economic adviser at EY ITEM Club. reckons UK house prices could easily stagnate through the rest of 2019, given consumer caution.
....very much fuel the overall impression that the housing market is being hampered as buyer caution amid already challenging conditions is being reinforced by recent heightened Brexit and economic uncertainties - although there are significant variations across regions with the overall picture being dragged down by the weakness in London and the South East.
12.42pm BST
George Buckley, Nomura's chief UK and European economist, has produced this chart showing how house prices in the North West of England have outperformed London since 2017.
The divergence is probably reflective of a number of factors - weaker global growth over the past year and Brexit having dampened London prices, as has general overvaluation in the capital, while regional prices being supported by the more traditional drivers of the housing market - i.e. rising wages, employment and low interest rates.
12.14pm BST
Over in Germany, the government has conceded that its growth forecasts have been too optimistic.
Berlin now expects the German economy will only expand by 0.5% during 2019, only half as fast as previously expected.
In line with reports that had appeared last week, the #German government halves its forecast for #GDP growth in 2019 to just 0.5% from 1.0%, primarily due to the woes of the #manufacturing sector. Sees growth improving to 1.5% in 2020, driven by consumer https://t.co/MADEXIiwrV
Germany cuts growth projection to 0.5%...a year ago same survey called for growth of 2.1% just wow.
11.37am BST
11.13am BST
Here's the regional breakdown of the latest UK house price data, showing that England is still the priciest place for housing.
10.58am BST
Brexit isn't the only factor behind Britain's house price slowdown.
Sharp cuts in tax breaks for buy-to-let landlords are another factor, experts say, as they've wiped out many of the profits from buying a house and renting it out.
"The death of buy to let, increased stamp duty and the prospect of interest rate hikes combined with Brexit instability makes the downward trajectory of house prices predictable. This decline looks set to continue for the foreseeable future.
"One way to curtail non-resident buyers, who have stoked the residential property market in the south east, is to increase stamp duty further. While Government is consulting on this now, many would argue its impact will be minimal given the housing market is already in decline in London, particularly in the premium market. A one per cent surcharge is unlikely to reverse this trend in the short term."
10.20am BST
Despite recent falls, London still remain the most expensive region to buy a property.
The average London house price is now 460,000, more than double the national average of 226,000 in February.
10.14am BST
UK house prices have actually been falling since last August, a clear sign that the market has cooled:
10.10am BST
The big picture is that UK house price growth has been slowing steadily since summer 2016....and a certain referendum.
House price inflation was 8.2% in June 2016, when Britain voted to leave the EU. It's now just 0.6%, as Brexit uncertainty has deterred some people from risking a house move.
10.00am BST
The ONS's head of inflation Mike Hardie says:
"Annual house price growth has slowed to the lowest rate in close to seven years.
Growth in Wales and the west of England was offset by a sustained fall in London and falling prices in the South East for the first time since 2011.
9.47am BST
Newsflash: House prices across the South East of England have fallen, for the first time in over seven years, as the slowdown in Britain's property sector deepens.
House prices across the South East declined by 1.8% in the year to February, the Office for National Statistics reports.
9.35am BST
Why was UK inflation unchanged at 1.9% in March?
According to the Office for National Statistics, rising prices for motor fuels and clothing pushed the cost of living higher last month.
9.31am BST
Newsflash: UK inflation held steady at 1.9% per year in March.
That matches February's reading, and is weaker than the 2% which City economists expected.
9.28am BST
Danny Blanchflower once explained that football isn't just about winning, it's also about glory -- playing with style and a flourish.
JUVENTUS FALLS AS MUCH AS 24% AFTER LOSS TO AJAX
Juventus shares crashing ~18% after last night's Champions League defeat, while Ajax shares are rallying in Amsterdam #UCL #JuveAjax #Ajax pic.twitter.com/H2eUXapUCW
8.58am BST
The problem with relying on government stimulus for growth is obvious -- a nasty hangover when the punchbowl is taken away.
Writing in the New York Times, Alexandra Stevenson explains how China's recovery may not be sustainable:
There is a caveat: The signs of improvement most likely do not stem from a sudden burst of confidence in the strength of the country's economy among Chinese business leaders.
Instead, the positive glimmers are largely a product of the hundreds of billions of dollars that Beijing has pumped into the country's economy in recent months and the loans that officials have pressed state-run banks to make. All of that comes at a cost, and it raises a question about how willing Beijing is to spend to keep growth going.
China's economy seems to be stabilizing. There is a caveat: The signs of improvement likely don't stem from a sudden burst of confidence among Chinese business leaders. A surge in lending gets the credit. https://t.co/sZdprYwbMr #china #GDP
8.49am BST
Today's GDP report also shows a jump in investment by China's companies.
Private sector fixed-asset investment, a gauge of confidence of Chinese private manufacturers and entrepreneurs, rose 6.4% in Q1 2019 first quarter compared to a year earlier.
Chinese industrial production and investment spending may be more important signals.
China has become a significantly larger global manufacturer - but rarely makes a product from start to finish. China is a link in the chain, so stronger Chinese production signals stronger production for other countries along the supply chain.
8.36am BST
China's growth report has helped to push the oil price up to a new high for the year.
Brent crude has hit $72 per barrel for the first time since last November, on expectation of higher demand from Chinese factories.
Brent oil reaches the highest level of 2019 (> USD 72/bbl) after US inventories seems to have dropped unexpectedly. This comes on top of the already positive sentiment based on US/China trade deal hopes and OPEC+ supply cuts.
WTI struggles to move higher...#OOTT #oil #energy pic.twitter.com/OAncz6F6fA
8.26am BST
This chart, from Durk Veenstra of RTL news, shows how Chinese industrial output has surged since Beijing ramped up its stimulus measures.
Over stimulatie gesproken. Iets komt omhoog in #China... pic.twitter.com/iCYkmo8UYi
8.16am BST
China's National Bureau of Statistics has urged caution, warning that the economy still faces downward pressures.
Spokesman Mao Shengyong told reporters:
"The national economy enjoyed stable performance with growing positive factors, and stronger market expectation and confidence.
"Given slowing global economic growth and international trade, increasing international uncertainties and prominent domestic structural issues, the task of reform and development is arduous and downward pressure on the economy persists."
8.05am BST
Tai Hui of JP Morgan Asset Management says Beijing's stimulus programme of higher government spending, lower taxes and wider credit availability are "starting to yield results".
This confirms that China's economic growth is bottoming out and this momentum is likely to continue.
Chinese growth momentum returns, thanks to policy measures implemented last year. GDP data came in above expectations, which suggests that China's economy is back on track... 1/2
...However, we still remain a bit cautious, because more positive data is needed medium-term, but one can tell China is out of the woods for now - something investors were looking for. 2/2 #China
In some ways the data are as expected -we all knew there was a state led drive to goose growth by building more roads and reflating the property market by easing restrictions, so pick up in FAI and property investment makes sense.
However, faster retail sales growth and a fall in unemployment don't sit with a lot of the other evidence of factory shutdowns, collapsing auto sales and sharply slowing import growth.
7.35am BST
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
#China GDP +6.4%
acceptable number given backdrop. pic.twitter.com/fpcxOt4OCu
"There is no denying that China's economy ended the first quarter on a stronger note.
China's economy will bottom out before long if it has not already."
JUST IN: China's economic growth unexpectedly held up in first quarter, with GDP rising 6.4% on year https://t.co/zbRDV1gYYz pic.twitter.com/1NmIZNQfgU
#China GDP figures higher than analysts had predicted (at 6.4%) meaning growth here could be faster than it seemed. (Keep in mind that plenty of analysts don't trust the Chinese GDP figures but...) increased bank lending and infrastructure spending are two factors driving it.
Related: UK pay grows at fastest rate since financial crisis - ONS
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