LONDON: Brexit continues to take a toll on the U.K., with new figures showing a fall in business confidence and continued weakness in the property market. House price-growth remained tepid in February, with values rising just 0.4 percent from a year earlier.
That’s better than the 0.1 percent figure in January, but far below the pace recorded in 2018.
The stress of leaving the European Union without a settled plan for future ties with the U.K.’s biggest trading partner is taking its toll. Prime Minister Theresa May this week conceded that exit day may need to be postponed as she tries to get her withdrawal deal through Parliament.
While that uncertainty is also hitting the housing market, a shortage of homes, record employment and low interest rates are preventing a sharp downturn in prices.
“Indicators of housing market activity, such as the number of property transactions and the number of mortgages approved for house purchase, have remained broadly stable in recent months, but survey data suggests that sentiment has softened.” said Robert Gardner, Nationwide’s chief economist.
A separate report from Lloyds published Thursday showed a gauge of optimism among firms plunged to a seven-year low as fewer companies expected activity to increase. Consumer confidence is still close to the lowest since 2013, a separate GfK gauge showed.
“The continuing depressed sentiment towards the general economic situation might point towards the calm before the storm of post-Brexit headwinds and potential negative economic outcomes,” said Joe Staton, client strategy director at GfK.
“It is frankly amazing that confidence is so stoic and stable in a world of sharp political instability and fear of the unknown.” - Bloomberg
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