Bank of England says workers can't all return to the office now; house prices hit record – as it happened

Graeme Wearden

from on 2020-09-02 18:08 (#57MXY)

Rolling coverage of the latest economic and financial news, as MPs quiz the Bank of England about the economic cost of Covid-19

Earlier:

7.08pm BST

And finally, here's our news story on the BoE's warning that workers won't be back at their desks for some time...

7.07pm BST

Travel on Britain's rail network was still more than half its usual levels yesterday - another sign that businesses agree with the Bank of England.

Transport correspondent Gwyn Topham explains:

Three million fewer passengers travelled on Britain's trains on Tuesday than a year ago, with only a slight increase in commuters rather than the widespread post-Covid return to offices that the government had urged.

Figures from train operators indicated that total journeys were just 38% of the equivalent day in 2019, a proportion that had been steadily increasing over the last two months but is only marginally higher than last week. An average 5 million passengers a day were travelling by rail in late 2019.

6.12pm BST

Here's a video clip of BoE official Alex Brazier explaining why MPs can't expect a sudden and sharp' return of office workers to their desk, despite pressure from the government to dial back home working.

Will we see a sudden return to offices?

Alex Brazier from the Bank of England told us that we shouldn't expect so, adding:

"We should expect a more phased return."

Watch the full session on demand here:https://t.co/K6x6q5Y9mS pic.twitter.com/OZt9N00xS6

5.23pm BST

Here's a quick recap of the main points from the Treasury Committee hearing.

The Bank of England has warned MPs that it isn't possible for all workers to return to their desks yet.

The first is people have a caution about the public health issues. I feel safe coming to work, but I quite understand why many people might not.

Public transport capacity is a related factor there.

That is a major issue for a great many parents. They have to feel that their children are being properly cared for, and that their children's education is being taken care of.

5.15pm BST

While the Treasury Committee was quizzing the Bank of England, the UK stock market closed higher.

The FTSE 100 index of blue-chip shares ended 78 points higher at 5940, a gain of 1.3%

5.12pm BST

Paul Craig, portfolio manager at Quilter Investors, hopes the government will heed the Bank of England's warning that Covid-19 will scar the UK economy.

The Bank of England has spelled out pretty clearly that this crisis will leave a scar on the UK economy. It expects GDP to be 1.5% lower as a permanent impact but uncertainty still prevails and as such we can't be sure how exactly the economy is going to respond. Live data points provide some comfort but it is right to remain cautious on how the recovery will play out.

What is clear is that the economy is going to need to be reshaped in order to recover. A sharp rise in unemployment is expected when the furlough scheme ends, while businesses will increasingly look to automation in order to plug gaps in their workforce and help control costs. As such some sectors and industries could be decimated despite consumption returning to pre-pandemic levels. It is becoming more and more obvious that the government will need to step in with more targeted fiscal support and provide more support for jobseekers.

5.08pm BST

Finally, Dave Ramsden tells MPs that Bank of England officials managed to deliver its Covid-19 rescue package from their homes.

Ramsden, who has responsibility for a lot of the BoE's operational functions, says the Bank learned the prosaic lesson' that people don't need to be in the office to do important jobs.

We've learned in the Bank of England that, in a crisis, we can run all our critical functions away from the office - whether it's Threadneedle Street or our Moorgate offices.

All interventions we've made, the creation of the CCFF, the QE, all the market activity to support the bank's interventions have all taken place from people's home offices.

4.44pm BST

Reuters have filed a report on the Treasury committee hearing - here's a flavour:

Bank of England Deputy Governor Dave Ramsden and another interest-rate setter, Gertjan Vlieghe, warned on Wednesday of risks that Britain's economy could suffer more damage than spelt out by the central bank last month.

Ramsden told lawmakers that the BoE had estimated the level of Britain's economic output would permanently be about 1.5 percentage points lower than it would have been without the pandemic.

4.43pm BST

The session now turns to the role of the banking sector in the pandemic.

Deputy governor Dave Ramsden says the commercial banks are well-capitalised, and in a position to lend to help customers. If they all do that, then the recovery will be stronger - and their credit losses will be lower.

What's really striking about this crisis and the recovery phase, is that banks are part of the solution.

They were the problem in the financial crisis, they exacerbated a real economic downturn and the meant that the recovery was more prolonged.

4.31pm BST

Back on Brexit, Andrew Bailey criticises the EU's approach to equivalence in financial services regulation.

The BoE governor insists that the UK has submitted all the information sought by the EU, but is concerned that Brussels is still seeing London as a rule-taker, he tells the Treasury Committee.

4.16pm BST

The Treasury Committee are also tweeting some key points, including the Bank's warning that the return to work will be gradual:

Alex Brazier tells the Committee:

"I don't think we can expect to see a sudden and sharp return of lots of people to very dense office environments that we were used to. We should expect a more phased return". pic.twitter.com/itIvjmPMZy

4.13pm BST

More highlights from the Treasury committee session:

Bank of England governor Andrew Bailey on negative rates - "It's in the box of tools. We're not planning it at the moment, we've got no plans to use it imminently but it is in the box. If it was the right thing to do... then the case for bringing it out of the box would be strong"

Bank of England deputy governor Ben Broadbent tells the Central Bank Research Association that aggressive monetary easing occurring at the same time as a sharp rise in government debt does not, in itself, constitute monetary financing

4.10pm BST

Q: Onto the housing market. Are first time buyers being squeezed out because lenders are demanding high deposits or imposing higher interest rates on them?

MPC Gertjan Vlieghe says that it's true that the rates offered to those with large deposits, and small ones, have widened recently - back to the levels seen a few years ago.

4.01pm BST

Q: Will the loans made to small businesses to help them through the crisis have a long-term negative effect on investment?

Bailey says there will be companies who come through the crisis with higher debt levels than they expected.

3.52pm BST

Q: What does the Bank of England see in business investment?

It is weak, in comparison with consumer spending, governor Andrew Bailey replies.

3.48pm BST

Deputy governor Dave Ramsden weighs in too, saying there is a limit to what the Bank can do to address disruption at the ports after a no-deal Brexit.

But, the Bank can step up the pace of its QE scheme significantly, he adds, if there is financial market disruption [QE means buying government bonds, and some corporate debt, with newly created money].

3.45pm BST

Q: What would the Bank do if the UK economy suffers a no-deal Brexit this winter and a second wave of Covid-19 cases?

Governor Andrew Bailey repeats his earlier point that the impact of a no-deal Brexit all depends how much trade is disrupted. He cites a Bank survey that found 60% of firms thought they were well prepared for Brexit.

3.39pm BST

Dame Collette Bowe, an external member of the Bank's Financial Policy Committee - says there's another important reason why people haven't returned to work -- children, and the return to school for the autumn term.

She tells MPs:

That is a major issue for a great many parents. They have to feel that their children are being properly cared for, and that their children's education is being taken care of.

Fell to only woman out of 5 BoE members addressing Treasury Select Committee to flag that one reason over reluctance to return to offices might in part reflect parents waiting to see how return to school goes

3.24pm BST

Q: Why are many City of London employers, such as big financial institutions, reluctant to bring their workers back to the office?

Alex Brazier, the Bank of England's executive director for Financial Stability Strategy and Risk , tells MPs that it simply isn't possible to get everyone back to their desks.

The first is people have a caution about the public health issues. I feel safe coming to work, but I quite understand why many people might not.

Public transport capacity is a related factor there.

It's not possible to use office space, particularly in central London and dense places like that, with the intensity that we used to use it.

It's not possible to bring lots of people back very suddenly.

Because of those constraints, I don't think we can expect a sudden and sharp return of lots of people to the very dense office environments that we were used to.

We should expect a more phased return, depending on the public health outcomes we see in coming weeks and months.

3.11pm BST

Q: How has the economy picked up since the pandemic lifted?

Andrew Bailey says it's an uneven picture. The recovery in consumption has been very fast, with household spending close to pre-pandemic levels and mortgage approvals very strong.

3.06pm BST

Onto Brexit, and the risk of a WTO-style no-deal at the end of this year.

Bailey says the key question is how much disruption is caused to trade.

3.03pm BST

Labour MP Angela Eagle challenges the Bank about its prediction that unemployment will hit 7.5% by the end of the year. Should it do more to prevent this?

Governor Andrew Bailey says no-one wants joblessness to rise, and the Bank is using its tools to fight it where possible.

2.55pm BST

Q: What is the price of gold telling the Bank of England about the economy, and inflation?

MPC member Gertjan Vlieghe swats this question away. It's a terrible idea" to look at the nominal price of gold, because you'd expect a perfectly stable asset to hit fresh record highs each month in nominal terms.

The fact it's at all-time high tells you nothing.

2.47pm BST

BoE deputy governor Dave Ramsden fears that the UK economy will suffer deeper economic scarring from Covid-10 than the Bank currently forecasts.

He warns the Treasury Committee that the commercial property sector could suffer a semi-permanent, or permanent, hit, due to the move towards home working.

We could find there is less demand for real estate in city centres as currently configured.

Unless the adjustment is very quick and happens easily, the chances are that the scarring effects over time could be larger [than 1.5%].

2.40pm BST

The session is underway, with committee chair Mel Stride asking the Bank of England about the downside risks faced by the UK economy.

Governor Andrew Bailey says the fan chart' in August's Monetary Report showing the various paths for the UK economy is wider than ever before, due to the huge uncertainty over Covid-19.

Bank of England Governor Andrew Bailey says scarring effect of Covid19 on economy likely to be 1.5% of GDP lower as permanent impact (but huge uncertainties). Says econ. debate will emphasise structural changes that result from pandemic

2.12pm BST

Andrew Bailey, Governor of the Bank of England, will testify to parliament's Treasury Committee about the economic consequences of Covid-19 shortly.

He'll be joined by four senior colleagues: Dame Colette Bowe of the Financial Policy Committee, executive director Alex Brazier, deputy governor Dave Ramsden and Dr Gertjan Vlieghe of the Monetary Policy Committee.

One hour to go until our evidence session with Andrew Bailey, Governor of the Bank of England, alongside members of the Financial Policy Committee and Monetary Policy Committee.

Watch it live at 14:30 here pic.twitter.com/tlU7k41k5U

2.01pm BST

More reaction to the payroll report:

ADP says privately run companies added 428,000 new jobs in August, well below Wall Street's 1 million forecast. ADP often misses the mark relative to the official U.S. jobs report, but it does seem like the economy is regaining jobs more slowly now ... https://t.co/DxU51v5cNA

Economic data is bleak: only pro-Republican or horse-race pundits, desperate to close Biden's lead, will try to spin this check-mark recovery as a good thing. ADP numbers just badly missed expectations.

2.00pm BST

Today's underwhelming ADP Payroll report raises the possibility that Friday's non-farm payroll (NFP) will miss forecasts.

The government's own employment report is expected to show that 1.4 million new jobs were created in August. If ADP are right, and there were just 428,000 new private sector hires, then the NFP could fall short.

First Look at August: ADP Says 428K Nonfarm Private Jobs Gained https://t.co/W9W6vp3BG1 pic.twitter.com/bqZAUMnhgI

1.53pm BST

ADP's payroll report also shows that small US companies created the fewest new jobs last month.

In contrast, large companies had the strongest job gains, with the highest job creation in the leisure and hospitality sector.

Signs of strain were evident in the ADP payroll report w small businesses reporting the weakest hiring gains. Inadequate and expiring stimulus is a glaring problem - let's hope Congress will act. pic.twitter.com/DhlBeECIwt

1.35pm BST

Just in: Fewer new jobs were created in America last month than expected, according to payroll operator ADP.

ADP has reported that private payrolls rose by 428,000 last month -much lower than the 950,000 which economists expected.

BREAKING:

*U.S. ADP PRIVATE PAYROLLS RISE BY 428,000 IN AUGUST, EST. 950,000 pic.twitter.com/6J5nTqfh1H

July ADP employment change revised up to 212,000 from 167,000.
- - - - -
7 ADP

167,000 212,000https://t.co/wcGcLdyiRI pic.twitter.com/iQD0nAtZqG

ADP #payrolls rose by 428K in August, significantly below the 1 million jobs expected. Compared to the peak in jobs back in February, more than 11 million remain lost. pic.twitter.com/gvoOFoX4k2

1.25pm BST

Over in the US, two retailers have beaten forecasts with their latest results.

Macy's, Inc. performance for the quarter was stronger than anticipated across all three brands: Macy's, Bloomingdale's and Bluemercury, driven largely by the sales recovery of our stores."

1.14pm BST

Time for a quick recap, while we wait for the latest US jobs data (the monthly ADP Payroll report).

12.58pm BST

In other political/economics news, work and pensions secretary Therese Coffey has argued that her colleague Rishi Sunak shouldn't raise taxes to cover the cost of the pandemic.

In a move that would cheer Arthur Laffer, Coffey argued that cutting taxes would actually raise more money.

In the past, when we have actually cut tax rates, we have seen taxes increase.

Tax rates are a very dynamic situation, and we need to make sure the chancellor has the best opportunities when he announces to the country.

12.36pm BST

Over in parliament, Boris Johnson has rejected calls to extend the UK's furlough scheme.

During Prime Minister's Question's, several MPs urged Johnson not to end the job retention scheme at the end of October, warning that it will lead to higher unemployment

12.11pm BST

Reuters are reporting that Virgin Atlantic's 1.2bn rescue deal has been approved by a London judge, at a court hearing this morning.

LONDON JUDGE SAYS TO GIVES GO AHEAD TO VIRGIN ATLANTIC RESTRUCTURING PLAN

12.01pm BST

Anyone who stuck in cash and missed out on the stock market recovery since March should take comfort that at least they didn't bet against it.

Some of the companies which speculators have bet against, such as Tesla, have rallied strongly in the last few months - meaning burnt fingers in the hedge fund world.....

Goldman Sachs basket of most shorted stocks just a hair shy of a record and up 116% since March. Ouch. pic.twitter.com/t1TYGbfzUR

Some big hedgies going to feel the pain me thinks#hedgefunds #goldman #stocks #fintwit $tsla $aapl $amzn $nflx $zm https://t.co/rjdWea0GFs

11.42am BST

Shares in UK housebuilders are continuing to rally, following the jump in house prices and the pick-up in demand reported by Barratt Developments.

Barratt is now up 8%, with Taylor Wimpey 5% higher, as the market holds onto this morning's gains.

Markets continue to seek the positive and ignore the negatives, but it is odd to see such relentless positivity in US markets when the pandemic has yet to subside, the economic impact is only just being felt and we have a US presidential election just a few weeks' away.

The reaction to Barratt Developments' full-year figures is a case in point of the market being as forward-looking as possible.

11.00am BST

Terry Smith, chief executive of Fundsmith, isn't concerned that markets are out of kilter with the real economy.

Speaking on Sky News, he says that record low interest rates are helping investors to look through the current steep downturn and plan for the recovery.

Movements in economies and markets aren't coterminous.

People will tell you that the only market that ends in a recession is a bear market, because markets are a bit forward looking.

Could the recession be followed by a new "roaring Twenties"? Here's the view from Fundsmith's Terry Smith talking to @SkyIanKingLive @IanKingSky https://t.co/bKdmKvAAha

10.41am BST

Heads-up, investors. The European Union's securities watchdog is worried that the stock market is overheating.

The European Securities and Markets Authority (ESMA) said there has been a potential decoupling" between the recent gains in the financial markets, and the economic damage caused by the COVID-19 pandemic,

** CORRECTION WARNING **

EU markets watchdog says stocks rebound out of kilter with COVID-hit economy ... RTRS

Stock markets face possibly significant corrections after rebounding beyond their coronavirus-hit economic fundamentalshttps://t.co/e3wdfGFed9

10.30am BST

Looking back at house prices, Nobel Francis of the Construction Products Association has shown how UK house prices climbed as mortgage rates fell steadily after the financial crisis:

The updated chart of London house prices & mortgage rates between January 2004 and May 2020. #ukhousing pic.twitter.com/tOVeanzQbH

10.26am BST

Over in Spain, unemployment has jumped as the Covid-19 pandemic hits its economy hard.

The number of jobless people rose by 0.79% in August, pushing up the national total to 3.80 million. That ends a three-month run of falling unemployment, as Spain unwound the strict lockdown imposed this spring.

The heavily tourism-dependent Balearic Islands were the hardest hit region, registering a 3% rise in unemployment.

The pace of job creation in Spain stagnated in August, with only 6,822 more people with a formal working contract and contributing to social security in that month, compared to an increase of 161,000 in July, the social security minister said on Wednesday.

Spain: Unemployment rises in August to highest level since 2016. Highest unemployment rate in the EU.

Youth unemployment 45.81% pic.twitter.com/mF5fXI8KVI

Registered unemployment rose again in Spain in August.https://t.co/FiRTT2lBEw pic.twitter.com/yX7n7xEw1n

10.13am BST

The Office for National Statistics has also reported that house prices have hit a record high.

Unfortunately, its new data only runs up to May, but it confirms the message from Nationwide earlier this morning (see opening post).

According to the ONS/Land Registry, UK average house prices increased by 2.9% in the year to May 2020 (up from 2.7% in April) with the highest growth in Yorkshire & Humber (4.9%), Wales (4.8%) & the North East (4.4%)...#ukhousing https://t.co/PWNBCYQJlV pic.twitter.com/G1WPuql1ir

10.04am BST

Alas, Lego don't make a model stock market. But in the actual City, shares are continuing to rise.

Britain's FTSE 100 is now up 1.8% or 105 points at 5967, recovering all Tuesday's fall. European markets are also buoyant, with Germany's DAX up 1.9% - and nearly positive for 2020.

A strong batch of US manufacturing numbers resurrected the dollar from the ranks of the dead and propelled Wall Street to another record high yesterday. The ISM manufacturing index jumped to its highest level in almost two years, turbocharged by a surge in new orders, which spells good news for economic activity in the coming months.

Something that flew under the market's radar yesterday was that the euro area officially fell into deflation in August. The yearly inflation rate fell below zero for the first time since 2016, and while the core rate remained positive, it still fell way short of forecasts.

9.33am BST

It's not only houses that have been in demand this year.

Many of the major trends shaping our industry, such as digitalisation and e-commerce, are accelerating as a result of the pandemic.

We saw strong growth in digital and traditional play, a rapid shift to e-commerce and the importance of having a truly global operating model."

Harry Potter fans can buy a Lego Diagon Alley set which comes with 5,544 pieceshttps://t.co/y5JduIoPya pic.twitter.com/kc3ucGDS6N

Come and explore the exclusive new LEGO Harry Potter Diagon Alley now! https://t.co/JgvD2V6CU3 @wizardingworld @HarryPotterFilm pic.twitter.com/FifpAgyz4f

9.12am BST

Here's our news story on the surprisingly sharp jump in UK house prices last month:

UK house prices surged at the fastest pace in 16 years in August as strong demand pushed the cost of an average home to a record high, defying the economic crisis caused by the coronavirus pandemic.

The average house price soared to 224,123 in August, the highest on record, according to data from Nationwide building society. Prices rose by 2% during the month, the fastest rate of increase since February 2004.

9.02am BST

Housing expert Henry Pryor points out that the average house price buyer has, on average, suffered less economic pain from Covid-19 than the rest of the population:

Most home buyers probably weren't furloughed & haven't suffered medically or financially through #CoronCrisis. These people set house prices.
Those who have lost jobs, seen reduced income or coped with Covid are more likely to rent and have bigger issues than moving home. pic.twitter.com/6FpuL8pUV4

8.54am BST

Overnight, Australia sank into its first recession in decades, due to the economic damage of Covid-19.

My colleague Martin Farrer explains:

Australia has slumped into recession for the first time in nearly 30 years as the coronavirus pandemic finally ended its record run of economic prosperity.

Not since George Bush Sr was US president and Bryan Adams ruled the pop charts has the country's economy suffered two consecutive quarters of negative growth, the official definition of a recession that was widely forecast after the pandemic hit.

8.40am BST

In the City, shares in housebuilders have jumped - lifting the FTSE 100 index away from the three-month low we hit last night.

Barratt are the top riser, up 6.5%, as investors welcomed news of strong demand since the lockdown lifted. Rivals Taylor Wimpey (+3.6%) and Persimmon (+3.5%) are also among the top risers.

There were a few different reports you could point to. In the UK, Matt Hancock has said that the law could be changed to fast track a vaccine before Christmas, while in the US Dr Anthony Fauci said a similar thing, stating that if the ongoing clinical trials were overwhelmingly positive, then a vaccine could arrive earlier than expected. To compliment these claims, human trials of the Oxford vaccine have now begun in the US.

This was more than enough for investors - so much so, in fact, that it meant they could ignore the US saying it won't join in with the global, WHO-backed effort to develop and distribute a vaccine.

8.24am BST

Barratt Developments, one of the UK's biggest housebuilders, has told the City that demand has increased sharply since the lockdown eased.

Barratt reported that reservations are running at 314 per week since the start of July, compared with 250 per week a year ago. Home completion are 62% higher than in 2019, as builders catch up with work delayed by the lockdown.

While COVID-19 has had a significant impact on our results, our priority has been to keep our people safe, mitigate the effect of the pandemic on our business and be able to emerge from the crisis in a resilient position.

Although uncertainties remain, all of our sites are operational, we are seeing very strong consumer demand and our robust financial position means we enter the new financial year with cautious optimism.

8.14am BST

Now this is interesting - and bad news for first-time buyers: HSBC is planning to cut back its low-deposit' mortgages, following a surge of interest.

My colleagues Kalyeena Makortoff and Patrick Collinson explain:

HSBC, one of the last banks to offer low-deposit 90%" mortgages, is expected to restrict sales within days, in a move likely to leave first-time buyers struggling to find a loan.

The bank's 400 mortgage advisers are currently flooded with applications from buyers, with customers forced to wait as long as three to four weeks to be interviewed by the bank. Meanwhile, the bank is opening a daily window of as little as half an hour in the morning for brokers to apply for loans before the daily allocation of money runs out.

8.10am BST

here's a note of caution from Andrew Montlake, managing director at UK mortgage broker, Coreco:

Two words: reality check. As strong as the property market is right now, it will not last.

Demand is understandably strong after lockdown and the added bonus of the stamp duty holiday, but unemployment is rising by the day and the economic outlook is highly uncertain as the furlough scheme ends.

8.00am BST

Lucy Pendleton, property expert at independent estate agents James Pendleton, agrees that the stamp duty holiday is fuelling the housing market -- and pushing prices sharply higher:

Buyers emboldened by the stamp duty holiday have been engaged in a pitch battle for property, delivering a barnstorming recovery for the market. A stunning proportion of properties are now going for asking price or more, and offers are flooding in. It's like lockdown was a bad dream.

The number of buyer registrations is also holding up at a time of the year that would typically see a slowdown.

7.55am BST

Jonathan Hopper, CEO of Garrington Property Finders, says rural estate agents and surveyors have seen a surge in demand this summer.

That includes families looking to quit the daily commuting rat race and move to a greener lifestyle, following the move to home working this year [despite the government's efforts to get everyone back to their old desks].

In some areas the property industry is playing catch up. We're seeing good homes go under offer very quickly but transactions take longer - as demand for surveyors outstrips supply and conveyancing firms race to dial up their capacity to handle a fast-growing workload.

Prices are rising fastest among coastal and country properties as buyers planning for a new work-life balance built around less commuting seek more green space, fresh air and better value.

7.45am BST

Tobi Mancuso, director of property investment company Track Capital, warns that the government's stamp duty holiday could drive a house price bubble.

That temporary cut lets buyers in England and Northern Ireland save 15,000 when buying a 500,000 house, so could drive demand for the next six months:

The chancellor's stamp duty holiday has launched the sale of the century, and properties are flying off the shelves as fast as they are getting listed.

Estate agents are rightly making hay while the sun shines, and house prices have accelerated to a new all-time high. Strap yourself in, because we're going to see a lot of records broken in the next few months.

7.40am BST

Capital Economics' Hansen Lu points out that house prices inflation is back at pre-pandemic levels:

Nationwide house prices up 2% m/m in August, taking annual growth back to 3.7% y/y. So back to"Boris bounce" territory we saw before COVID. Mental. pic.twitter.com/pl4i7GmAjB

7.37am BST

This jump in UK house prices makes homes even less affordable.

At 3.7% per year, prices are now rising much faster than incomes -- particularly as many people's earnings fell during the pandemic (because they were furloughed, lost their jobs, or saw work dry up).

7.29am BST

Here's the key points from Nationwide's house price report:

7.27am BST

Nationwide also predicts that house prices will keep rising this autumn, partly thanks to government's temporary stamp duty freeze [in England and Northern Ireland, anyway].

Chief economist Robert Gardner explains:

These trends look set to continue in the near term, further boosted by the recently announced stamp duty holiday, which will serve to bring some activity forward.

Most forecasters expect labour market conditions to weaken significantly in the quarters ahead as a result of the aftereffects of the pandemic and as government support schemes wind down. If this comes to pass, it would likely dampen housing activity once again in the quarters ahead.

7.10am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
UK house prices have accelerated to a fresh record high, as the property market rebounds after the Covid-19 lockdown.

New figures just released by Nationwide show that the cost of the average house surged by 2% in August alone, up to 224,123 from 220,935 in July.

UK August Nationwide House Prices Report - Nationwidehttps://t.co/1e83wu9hsK pic.twitter.com/DRoxpIoBgY

UK house prices rose by 2.0% in August, after taking account of seasonal effects, following a 1.8% rise in July. This is the highest monthly rise since February 2004 (2.7%). As a result, annual house price growth accelerated to 3.7%, from 1.5% last month.

House prices have now reversed the losses recorded in May and June and are at a new all-time high.

Not only is Apple @Apple worth more than the FTSE 100, but Zoom is worth more than IBM. @BBCr4today #R4Today

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