UK house prices saw the fastest growth in July since December 2022, with annual inflation rising to 2.1% according to data from Nationwide. The average price of a property sold reached £266,334, a 0.3% increase from June. Despite this growth, prices are still 2.8% below all-time highs recorded in summer 2022. The stability in the housing market is reflected in the number of mortgages approved for house purchase, which remains steady around 60,000 per month.
In light of these figures, the Bank of England is expected to announce a rate cut today. UK government bond prices have strengthened in anticipation of this decision. While analyst predictions vary, most expect a narrow majority in favor of a rate cut, citing recent economic recovery and the need to maintain growth. Professor Costas Milas suggests that cutting interest rates now is an urgent matter to avoid a wage-price spiral and boost service sector inflation.
On a corporate level, engineering group Rolls-Royce has raised its profit forecast and plans to pay a dividend for the first time since the pandemic. The company reported an operating profit of £1.65bn for the first half of 2024 and is on track to deliver mid-term targets. Shares in Rolls-Royce have increased by almost 10% following this news.
Overall, the economic landscape shows signs of growth and stability, with both the housing market and corporate sector indicating positive trends. The Bank of England’s decision on interest rates will be closely watched for its impact on the broader economic outlook.
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