Alan John Clarke (28 October 1935 – 24 July 1990) was an English television and film director, producer and writer. (wikipedia)
Mortgage approvals highlight a significant probability that we will see double-digit house price inflation this year. The MPC would do well to learn from last year's mistakes and react sooner rather than later.
We believe that with inflation rising rapidly, and concerns among the hawks that it will be harder to bring under control ... the door has been closed to further cuts.
The worst news on UK inflation is yet to come. The probability of a further rate cut is clearly reducing.
For now, the 8-1 vote will provide ammunition to the doves that expect the next move to be a cut.
The rise in equity withdrawal is consistent with the rebound in house price inflation. It shows spending growth is increasingly dependent on equity extraction on top of take home pay.
Overall, this reinforces signs that we have seen the worst news on UK activity.
Tourism is a barometer of normalcy, and tourism is doing exceptionally well. Of course, we are starting from a low base, but we are a rising star in Europe.
The decent numbers we have seen will persist because mortgage approvals have rebounded so strongly and they are almost at the peak we saw in 2004.
Speculation that we will see deep interest rates is overdone. In the context of the widely anticipated rate cut in August, it is not surprising that the Halifax figures rose. Mortgage approvals suggest we should soon get better news on house-price inflation.
The key message is housing market activity has improved significantly into the second half of this year and confirms the downside risks to growth from the housing market are vanishing.
