Fresh economic data released as December begins paints a picture of a cooling UK economy in the run-up to the recent Autumn Budget. Key indicators from the property and retail sectors show a marked slowdown in activity and growth.
Property Market Hits a Plateau
According to the latest report from lender Halifax, UK house prices were broadly unchanged in November. The average property price held steady at £299,892, following a modest 0.5% increase recorded in October.
This stagnation has contributed to a significant slowdown in annual house price growth. Prices in November were just 0.7% higher than the same month last year, a sharp drop from the annual inflation rate of 1.9% seen in October.
Amanda Bryden, Head of Mortgages at Halifax, commented on the findings. She stated that the consistency in average prices reflects one of the most stable years for the housing market in the last decade. Bryden noted that property values remained steady despite changes to Stamp Duty in the spring and pre-Budget uncertainty.
A Silver Lining for First-Time Buyers
While the slowdown may disappoint existing homeowners, Bryden highlighted a positive outcome for new entrants to the market. "Affordability is now at its strongest since late 2015," she explained, when comparing property prices to average incomes.
Furthermore, even with today's higher interest rates, mortgage costs as a share of income are at their lowest level in around three years. This shift offers a glimmer of hope for those struggling to get onto the property ladder.
Retail Sector Feels the Pinch
Parallel data from the high street reveals a similar trend of restraint. A survey by business advisory service BDO found that in-store sales grew by a meagre 1.3% in November.
This weak growth occurred despite the potential boost from Black Friday promotions. Crucially, the figure is well below the current rate of inflation, meaning the volume of goods actually sold was significantly lower than the same period last year.
The combined data from housing and retail provides clear evidence that consumer confidence and spending power were under pressure as the year approached its close.
The Day's Economic Agenda
The release of these key figures was part of a broader economic schedule for Friday, which included:
- German factory orders data for October.
- The UN food commodities price index.
- US PCE data, the Federal Reserve's preferred inflation measure.
- The University of Michigan consumer confidence report.
