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EnglishپارسیEnglishپارسیUK house prices accelerated in July, with the Halifax index rising 0.4% month-on-month, well above the 0.1% gain in both June and the market forecast. Annual growth eased slightly to 2.4%, down from 2.7% in June, indicating that prices are still climbing but at a more moderate pace year-over-year. The stronger monthly pickup was driven by renewed buyer interest and limited stock, especially in suburban markets. Sustained price growth may bolster household wealth but risks further squeezing affordability. With mortgage rates still elevated, potential homebuyers may feel the pinch. The Bank of England will watch housing data closely, as continued upward pressure on prices could complicate its efforts to balance economic growth and inflation control.
Britain’s S&P Global construction PMI plunged to 44.3 in July, down sharply from 48.8 in June and well below the 48.9 forecast. The reading signals the steepest contraction in activity since early 2024, driven by a sustained drop in new orders, tighter financing conditions and rising material costs. Firms reported cutting back on projects as commercial and residential demand softened. With construction accounting for a significant share of investment and employment, the weak PMI points to downside risks for GDP growth in the third quarter. The downturn may prompt policymakers to consider targeted support for developers or infrastructure spending to stabilize the sector and safeguard jobs.
Britain’s services sector lost momentum in July, with the S&P Global services PMI easing to 51.8 from 52.8 in June, though it exceeded the flash estimate of 51.2. The composite PMI, combining services and manufacturing, slipped to 51.5 from 52.0, also above the initial 51.0 reading. Survey data showed new business falling below the 50‑point growth threshold for the first time since late 2023 as clients delayed orders amid global uncertainty. Employment dropped at the sharpest pace since February, reflecting hiring freezes and redundancies as firms grappled with subdued demand and cost pressures. Input costs eased but remained elevated, while selling prices ticked higher. Despite the slowdown, business optimism improved thanks to receding tariff worries and expectations of interest‑rate cuts later this year. A PMI reading above 50 signals expansion, so the data suggests the UK economy continues to grow but at a slower pace, potentially prompting the Bank of England to consider rate cuts while monitoring inflation.
KEY FIGURES
WHAT IT MEANS
Consumer credit surged beyond expectations and household borrowing costs remained affordable amid steady money supply growth, underscoring robust credit demand and abundant liquidity in the UK economy.
MARKET REACTION
Sterling held near multi‑month highs and FTSE futures ticked up modestly as investors digested signs of sustained domestic demand.
OUTLOOK
Markets will monitor upcoming CPI data and the Bank of England’s August policy meeting for clues on whether persistent credit growth will influence future rate decisions.
KEY FIGURES
BRC Shop Price Index YoY: 0.7% (est: 0.2%; prev: 0.4%)
WHAT IT MEANS
Retail price growth moderated versus forecasts but remains elevated, reflecting ongoing supply‑side constraints and cost pressures across UK consumer goods.
MARKET REACTION
The pound held steady against major currencies, and FTSE futures were little changed as traders took the data in stride.
OUTLOOK
Investors will eye upcoming CPI and Bank of England commentary for clues on whether retail inflation will continue to cool.
KEY FIGURES
Core Retail Sales YoY (Jun): 1.8% (est: 2.0%; prev: -1.2%)
Core Retail Sales MoM (Jun): 0.6% (est: 1.2%; prev: -2.9%)
Retail Sales MoM (Jun): 0.9% (est: 1.2%; prev: -2.8%)
Retail Sales YoY (Jun): 1.7% (est: 1.8%; prev: -1.1%)
WHAT IT MEANS
Both core and headline retail sales rebounded in June after sharp declines earlier in the year, signaling that consumer spending remains resilient despite elevated inflationary pressures.
MARKET REACTION
Sterling strengthened against the US dollar and FTSE futures ticked higher as investors interpreted the figures as supportive of domestic demand.
OUTLOOK
Analysts will watch upcoming inflation and wage growth reports, along with Bank of England commentary, for further clues on the sustainability of consumer spending and potential policy adjustments.
KEY FIGURES
• GfK Consumer Confidence (Jul): –19 (est: –19; prev: –18)
WHAT IT MEANS
Household sentiment remained subdued and in line with forecasts but weaker than last month’s reading, suggesting consumers continue to hold back spending amid persistent economic uncertainty.
MARKET REACTION
The pound was little changed against major currencies, and FTSE futures showed minimal movement following the report.
OUTLOOK
Investors will monitor upcoming retail sales and inflation data, as well as the Bank of England’s minutes, for further insight into consumer spending trends.
The latest UK PMI and CBI data reveal modest services growth but persistent weakness in manufacturing and order books.
🔹 Key Data (July):
📊 What it Means:
Services continue to expand, albeit more slowly than expected, pointing to resilient consumer spending. Manufacturing remains in contraction but outperformed forecasts, while order books remain deeply negative, signaling ongoing headwinds for factory output.
The CBI Distributive Trades Survey rose to -34 in July, improving from -46 in June and beating expectations of -28. This suggests a modest recovery in retail sentiment, though conditions remain weak overall.
Retailers continue to face pressure from fragile consumer demand, but the latest reading signals a slight easing in pessimism.
Car registrations in the UK climbed sharply in June, reflecting improved consumer sentiment and fleet demand.
🔹 Key Data:
📊 What it Means:
The strong rebound suggests growing momentum in the auto sector, possibly aided by easing inflation and stable financing conditions.
The UK’s public sector net borrowing jumped to £20.68B in June, significantly exceeding expectations and reflecting persistent fiscal pressure. However, the government’s net cash requirement turned negative.
🔹 Key Data:
📊 What it Means:
The sharp rise in borrowing highlights continued budgetary challenges amid higher debt interest payments and spending. The surprise negative cash requirement suggests temporary inflows or deferred spending, but fiscal risks remain elevated.
Rightmove data revealed a notable decline in UK asking prices in July, with monthly figures showing the steepest drop of the year so far.
🔹 Key Data:
📊 What it Means:
The housing market is under pressure from higher mortgage costs and cautious buyer sentiment. While year-on-year growth remains marginally positive, monthly declines point to softening demand ahead of the key autumn selling season.