LONDON (Reuters) – British home costs fell unexpectedly for the primary time in six months throughout February, reflecting a subdued client economic system, mortgage lender Nationwide mentioned on Thursday.
House costs fell zero.three % month-on-month after a zero.eight % rise in January, Nationwide mentioned. The consensus of economists polled by Reuters had pointed to a rise of zero.2 %.
In annual phrases, home costs rose 2.2 %, slowing sharply from development of three.2 % in January. The Reuters ballot had pointed to development of two.6 %.
“Month-to-month changes can be volatile, but the slowdown is consistent with signs of softening in the household sector in recent months,” Nationwide chief economist Robert Gardner mentioned.
“Retail sales were relatively soft over the Christmas period and at the start of the new year, as were key measures of consumer confidence, as the squeeze on household incomes continued to take its toll.”
Consumers, often the principle driver of Britain’s economic system, have been squeezed by excessive inflation for the reason that 2016 Brexit vote prompted the pound to drop in opposition to different currencies. Britain was the slowest rising economic system out of the Group of Seven wealthy nations over the course of 2017.
Nationwide mentioned the outlook for home costs would rely partly on the trail of Bank of England rates of interest and the progress of Britain’s negotiations to depart the European Union.
A Reuters ballot of economists revealed final week confirmed British home costs are prone to develop weakly over the following few years, at an annual round 2.zero %.
Reporting by Andy Bruce; Editing by Catherine Evans