Nationwide: UK house prices decline 1% in March
UK house prices suffered their most significant monthly fall in over two years in March, as Nationwide announced that prices were lower by 1% on the month, on a seasonally adjusted basis. The news came as a surprise to most economists, who had anticipated a small increase in prices following a 0.4% appreciation in February. Analysts have highlighted the ending of a stamp duty holiday for first time buyers of homes costing up to £250,000 as a factor in the house price depression.
US data was more upbeat, with GDP growth confirmed at an annualised 3% in the final quarter of 2011, as opposed to the downward revision suffered by the UK over the same period. Adding further support to calls of an improving economic picture was employment data that showed the number of new applications for unemployment benefits (initial jobless claims) decreased from 364,000 to 359,000 in the week to the 24th March. The level of 400,000 is often seen as crucial as below this level economists suggest that the economy is typically adding jobs. Initial claims have been sub 400,000 since October 2011.
The data was however insufficient to offset concerns surrounding the Eurozone, with comments from S&P highlighting that underlying concerns remain. The head of sovereign ratings at the ratings agency suggested it is likely that Greece will require further debt restructuring, possibly including bailout partners such as European governments. Italian and Spanish 10 year bonds yield also rose by a considerable amount, although they remain depressed compared to the highs seen during 2011. It came as Spanish workers undertook major strikes across the country prior to tomorrow’s 2012 budget to be announced by Mariano Rajoy.
The FTSE 100 weakened throughout the day, eventually closing down near its lows at 5739.8, a 1.2%
or 69.2 point decline.
This was posted in Bdaily's Members' News section by James .