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EnglishپارسیEnglishپارسیThe UK housing market showed signs of losing steam in November, with Halifax House Price Index data pointing to softer momentum.
The data suggest that although prices remain broadly resilient, the earlier recovery is fading as borrowing costs remain elevated.
Market impact: Neutral to slightly bearish for GBP; softer housing data reinforces expectations of a cautious Bank of England.
The average UK mortgage rate remained unchanged at 6.81% in November, signalling a pause in borrowing-cost pressures despite volatile gilt yields and shifting Bank of England rate expectations.
Stable mortgage rates suggest lenders are maintaining cautious pricing as the housing market shows early signs of stabilisation after months of subdued activity.
Market impact: Neutral for GBP and UK housing sentiment; steady rates may offer slight relief to buyers but housing affordability remains tight.
The UK construction sector deteriorated sharply in November, with the S&P Global Construction PMI dropping to 39.4, well below expectations of 44.5 and down from 44.1 previously.
This marks one of the weakest readings since the pandemic, reflecting steep declines in new orders, tighter financial conditions, and continued weakness in housing and commercial construction.
Market impact: Bearish for GBP; the severe contraction highlights growing economic pressure and weighs on broader sentiment.
UK car registrations declined in November, with new vehicle registrations down 1.6% year-on-year, compared with a 0.5% increase previously. The drop signals cooling consumer demand amid higher financing costs and lingering economic uncertainty.
A total of 144,948 new passenger cars were registered during the month, reflecting a slower pace for the auto market heading into year-end.
Market impact: Mildly bearish for GBP; weaker auto demand underscores softer consumer activity.
UK business activity picked up modestly in November.
The S&P Global Composite PMI rose to 51.2, above expectations of 50.5, though still below the previous 52.2, signalling a return to moderate expansion after recent soft patches.
The Services PMI also improved to 51.3, beating the expected 50.5, but down from 52.3 in the prior month, indicating softer—but still expanding—service-sector activity.
The readings show the UK economy maintaining mild growth, supported by services' resilience even as demand remains uneven.
Market impact: Mildly bullish for GBP; better-than-expected PMIs help sentiment, though underlying momentum remains modest.
UK housing data showed modest improvement in November. The Nationwide House Price Index rose 0.3% month-on-month, beating expectations of 0.0% and slightly above the previous 0.2%, signalling a steady recovery in short-term price momentum.
On a yearly basis, prices increased 1.8%, above expectations of 1.4%, though slower than the prior 2.4%, indicating that while the market is stabilising, broader affordability pressures and high mortgage rates continue to weigh on annual growth.
Market impact: Neutral to mildly bullish for GBP; firmer monthly housing data supports sentiment, though softer annual growth tempers the outlook.
The UK’s BRC Shop Price Index eased to 0.6% year-on-year, down from 0.9% previously and well below earlier readings such as 1.0%. The slowdown reflects easing food inflation and deeper discounting by retailers ahead of the holiday season. The moderation signals improving price conditions for consumers, although weak demand and tighter household budgets continue to pressure the retail sector.
Market impact: Mildly bearish for GBP; softer shop price inflation reinforces expectations of cooling consumer spending and a more cautious Bank of England.
UK housing and credit data for October offered a mixed picture. Mortgage Approvals rose to 65.02K, above expectations of 64.00K, though slightly below the previous 65.65K, signalling steady demand for home purchases. Mortgage Lending, however, slowed notably to £4.27B, down from £5.22B, reflecting weaker loan growth. Net Lending to Individuals also cooled to £5.40B, missing expectations of £6.40B and falling from £6.60B, pointing to softer household borrowing amid higher interest rates and tighter financial conditions.
Market impact: Mildly bearish for GBP; softer lending metrics highlight cooling credit demand and a slowing consumer environment.
The UK’s S&P Global Manufacturing PMI remained unchanged at 50.2 in November, matching both expectations and the previous reading. The steady result keeps the sector just inside expansion territory, suggesting stabilizing factory activity despite subdued demand and ongoing cost pressures. The flat reading signals that momentum is neither improving nor deteriorating meaningfully as businesses navigate a sluggish economic backdrop.
Market impact: Neutral for GBP; stable PMI offers no strong directional signal but supports a view of modest, steady industrial conditions.
UK financial data for October pointed to softer credit conditions and weakening liquidity. Consumer Credit rose £1.119B, below the previous £1.398B, signalling easing household borrowing demand. Broad money measures also weakened: M3 Money Supply slipped to £3,174.2B from £3,181.2B, while M4 Money Supply fell 0.2% month-on-month, missing expectations of 0.4% and down from 0.6% previously. The data suggests tightening financial conditions and slower lending momentum as higher interest rates continue to filter through the economy.
Market impact: Mildly bearish for GBP; softer credit growth and shrinking money supply point to weakening demand and cooling economic activity.
It’s shaping up to be a make-or-break moment for Britain’s finance minister, Rachel Reeves, who is set to unveil a budget later today expected to include tens of billions of pounds in new tax increases. Markets are watching closely to see whether the measures can balance fiscal consolidation with support for growth.
Ahead of the announcement, sterling edged 0.2% higher to $1.3193 in Asian trading, marking its fifth straight day of gains as traders position for a potentially market-moving speech.
Market impact: Mildly bullish for GBP; pre-budget optimism supports the pound, but further direction will hinge on the fiscal details Reeves presents.
The CBI Distributive Trades Survey slipped to –29 in November, below expectations of –27 and signaling a deeper contraction in retail activity. The decline highlights soft consumer demand and continued pressure on UK retailers heading into the year-end period.
Market impact: Mildly negative for GBP; weaker retail sentiment underscores fragile consumption and a cooling economic backdrop.