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UK CBI Index Posts Positive Surprise

James Boston
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UK CBI Index Posts Positive Surprise

The UK economy remains on course to finish the year on a high note if the latest minor indicators are anything to go by. The Confederation of British Industry has just published it’s headline Industrial Trends Survey for the month of December, the month on month indicator for Orders has come in at a reading of 5, this represents a clear pickup on the November reading of 3 and there were no expectations for any change to the number this month.

It is not however all steam ahead for UK growth, overnight Rightmove published an update to their House Price Index and this is showing some welcome cooling in this sector. The latest month on month reading for December reveals a contraction of -3.3% in house prices, this is an acceleration of the -1.7% contraction experienced in November. This latest fall takes the year on year index lower to read at 7.0% from the elevated 8.5% experienced the previous month. In real terms these latest figures represent a fall of £9k on the average asking price of a home across the UK, with the figure rising to represent a drop in house values in the capital of almost £30k in just one month.

The British economy traditionally experiences a slowing in the final quarter of the calendar year as central government wraps up spending, this year may prove to be an exception as the momentum from growth in the economy throughout the year continues unabated. In the real estate market however there is little in the way of government spending, particularly on the higher end London properties, there is therefore not much to explain the recent drop in prices other than perhaps a recently announced change in the stamp duty legislation by the Chancellor in his Autumn statement to the House of Commons two weeks ago.

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