Price growth is on a softening trend and we continue to believe that the outlook for the housing market over the medium term is one of flat to falling prices.
Energy bills are going up, people are worried about their pensions and the labor market is loosening. All of those are reasons why the consumer may not be as strong going forward.
The sell-off at the short end (of the yield curve) is understandable in light of this data, with the market now pricing 50 basis points of rate hikes by the end of next year.
The strengthening of both the retail sector over Christmas and the housing market over recent months should limit the opposition to keeping rates on hold next week.
Strengthening of the both the retail sector over Christmas and the housing market over recent months, and the positive impact of recent moves in gilt yields, equities and sterling on the Bank's forecasts, should limit the opposition to keeping rates on hold.
An improvement in the outlook for the services sector, a stronger housing market and expectations of a reasonable Christmas for retailers should be enough to keep the Bank of England on hold (in January).
It looks like the decline has been generated largely because of excess optimism in the housing construction market a month ago which was not sustained.
The general picture from the housing market has not changed,
The January numbers looked overly weak, in light of recent developments in the housing market so some recovery in these figures was to be expected.