Pund faller när experter förutspår att huspriserna kommer att falla med minst 10 % nästa år – Business Live | Företag

Sir Keir Starmer, the Labour leader, said his own variable rate mortgage has gone up by a few hundred pounds. He told LBC radio this morning:

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So many people with mortgages will be really worried by what’s going on because they know what this means for their their budgets – prices are going up.
We all look at the graph and we see the pound falling, but it’s not an abstract graph. This is reflected in people’s mortgages, etc. And people are very, very worried this morning.

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He said the government has got to set out “how are they going to fix the problems that they have made”, with the November statement [on 23 November] “far too long off” to review the situation.

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He also said his party was more united and confident than it had been in years and people at the Labour conference in Liverpool “can feel something in the air”.

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And what they’re feeling in the air, I think, is change – because obviously, the government we’ve got has made an absolute mess of the economy and here you’ve got a Labour Party calmly, carefully and with confidence, setting out alternative plans for our economy and for our public services.

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November statement ‘far too long off’ to review tax cuts”,”contributors”:[],”primaryDateLine”:”Wed 28 Sep 2022 03.24 EDT”,”secondaryDateLine”:”First published on Wed 28 Sep 2022 02.24 EDT”},{“id”:”6333eccd8f086841b84c373e”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Ray Boulger, from the mortgage broker John Charcol, has predicted a 10% fall in UK house prices next year, while analysts have warned prices could drop as much as 15%.

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Boulger says the gilt market meltdown, and the risk of interest rates rising to 6% by next summer “makes it very difficult to know where to price mortgage products”. This will undoubtedly have an impact on the housing market. He told BBC radio 4’s Today programme:

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We can expect to see a significant fall in house prices, perhaps 10% next year.

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Whilst at the moment I don’t think we’re going to see many more forced sellers… it’s certainly going to have an effect on people’s ability to buy.

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Analysts at Credit Suisse are warning that higher interest rates, rising inflation and the risk of recession could lead to house prices falling by between 10% and 15%. Andrew Wishart, senior property economist at Capital Economics, has also warned of a similar slump.

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The rise in market interest rates that has already happened will push up mortgage rates to at least 6% and reduce the size of loans that lenders can offer. The resulting drop in buying power makes a significant drop in house prices inevitable.

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Hundreds of mortgage deals have been pulled by banks and building societies, including HSBC and Santander.

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Kwarteng’s £45bn unfunded tax cuts, which mainly benefit the wealthy, have stoked fears of a borrowing binge and led to a government bond meltdown since Friday. The selloff has pushed up yields – the interest paid on government debt – which move in inverse relationship to prices.

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The yield on the benchmark 10-year gilt, as UK government bonds are known, has retreated slightly but is hovering around 4.39%, up sharply from 3.1% before Friday’s mini-budget.

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Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, explains:

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[Yields] have hit the highest level since the financial crisis in 2008, which is piling pressure on mortgage holders, given gilt yields have an impact on swap rates, which guide lenders’ mortgage offers. Corporate bond yields have shot up even for investment grade companies, considered to be low risk, adding to worries that companies needing to refinance soon or borrow more to cope with rising input costs could struggle to make repayments.

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To finance higher borrowing to pay for the tax cuts, an extra £72.4bn in debt sales are now planned for the current financial year alone. On top of this, the Bank of England plans to sell about £40bn of bonds over the next year to wind down its quantitative easing programme.

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Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

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In a stinging attack, the International Monetary Fund has urged Liz Truss’s government to reconsider its tax-cutting plans to prevent stoking inequality.

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In rare public criticism of a leading global economy, the Washington-based fund said Kwasi Kwarteng’s mini-budget risked undermining the efforts of the Bank of England to tackle rampant inflation amid the cost of living emergency.

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It said a fiscal policy announcement planned by Kwarteng for 23 November presented an “opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high income earners”.

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Keir Starmer, leader of the opposition Labour party, said the IMF’s criticism shows how serious the situation is. He told LBC Radio:

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The IMF statement is very serious and it shows just what a mess the government have made of the economy and it’s self-inflicted, this was a step they didn’t have to take.

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On the markets, sterling is on the backfoot again, slumping as much as 1% to around $1.06, while the dollar has hit a fresh 20-year high as rising global interest rates stoked recession fears. The pound fell to an all-time low of $1.0327 against the dollar on Monday morning, and had traded around $1.1300 before Friday’s mini-budget.

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Seen as a safe haven, the dollar rose 0.5% against a basket of major currencies to hit a new peak of 114.7 in Asian trade. The yield on benchmark US 10-year government bonds also climbed, to 4% for the first time since 2010, peaking at 4.004%.

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Moh Siong Sim, a currency strategist at Bank of Singapore, told Reuters:

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It’s a combination of the spillover from the UK… where the gilt yields have gone ballistic. And that has spilled over into other developed market bond markets, so there’s a bit of a ricochet effect.

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And of course… this is against the backdrop of a very determined message by the Fed to do whatever it takes to bring inflation down.

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The Bank of England is likely to deliver a “significant policy response” to the UK’s tax cuts, its chief economist Huw Pill said on Tuesday afternoon. But Pill also argued that the Bank should wait until its next scheduled meeting in the first week of November (rather than through an emergency rate hike).

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Truss and Kwarteng apparently disagreed over how to deal with the crash in sterling. Downing Street denied that there was a row.

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However, Whitehall sources said there was talk within the civil service of an argument between the prime minister and chancellor at their meeting on Monday morning, and Sky News said Truss had been resisting Kwarteng’s suggestion that a Treasury statement was needed to calm the markets.

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The Agenda

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  • 7.45am BST: France Consumer confidence for September (forecast: 80)

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  • 8.15am BST: ECB president Christine Lagarde speech

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  • 9am BST: Italy business and consumer confidence for September (forecasts: 102.1 / 95.1)

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  • 9.15am BST: Bank of England deputy governor Jon Cunliffe speech

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  • 1.30pm BST: US trade for August

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  • 3pm BST: US Pending home sales for August

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  • 3.15pm BST: US Federal Reserve chair Jay Powell speech

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Stora evenemang

Sir Keir Starmer, the Labour leader, said his own variable rate mortgage has gone up by a few hundred pounds. He told LBC radio this morning:

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So many people with mortgages will be really worried by what’s going on because they know what this means for their their budgets – prices are going up.
We all look at the graph and we see the pound falling, but it’s not an abstract graph. This is reflected in people’s mortgages, etc. And people are very, very worried this morning.

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He said the government has got to set out “how are they going to fix the problems that they have made”, with the November statement [on 23 November] “far too long off” to review the situation.

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He also said his party was more united and confident than it had been in years and people at the Labour conference in Liverpool “can feel something in the air”.

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And what they’re feeling in the air, I think, is change – because obviously, the government we’ve got has made an absolute mess of the economy and here you’ve got a Labour Party calmly, carefully and with confidence, setting out alternative plans for our economy and for our public services.

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November statement ‘far too long off’ to review tax cuts”,”contributors”:[],”primaryDateLine”:”Wed 28 Sep 2022 03.24 EDT”,”secondaryDateLine”:”First published on Wed 28 Sep 2022 02.24 EDT”},{“id”:”6333eccd8f086841b84c373e”,”elements”:[{“_type”:”model.dotcomrendering.pageElements.TextBlockElement”,”html”:”

Ray Boulger, from the mortgage broker John Charcol, has predicted a 10% fall in UK house prices next year, while analysts have warned prices could drop as much as 15%.

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Boulger says the gilt market meltdown, and the risk of interest rates rising to 6% by next summer “makes it very difficult to know where to price mortgage products”. This will undoubtedly have an impact on the housing market. He told BBC radio 4’s Today programme:

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We can expect to see a significant fall in house prices, perhaps 10% next year.

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Whilst at the moment I don’t think we’re going to see many more forced sellers… it’s certainly going to have an effect on people’s ability to buy.

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Analysts at Credit Suisse are warning that higher interest rates, rising inflation and the risk of recession could lead to house prices falling by between 10% and 15%. Andrew Wishart, senior property economist at Capital Economics, has also warned of a similar slump.

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The rise in market interest rates that has already happened will push up mortgage rates to at least 6% and reduce the size of loans that lenders can offer. The resulting drop in buying power makes a significant drop in house prices inevitable.

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Hundreds of mortgage deals have been pulled by banks and building societies, including HSBC and Santander.

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Kwarteng’s £45bn unfunded tax cuts, which mainly benefit the wealthy, have stoked fears of a borrowing binge and led to a government bond meltdown since Friday. The selloff has pushed up yields – the interest paid on government debt – which move in inverse relationship to prices.

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The yield on the benchmark 10-year gilt, as UK government bonds are known, has retreated slightly but is hovering around 4.39%, up sharply from 3.1% before Friday’s mini-budget.

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Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, explains:

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[Yields] have hit the highest level since the financial crisis in 2008, which is piling pressure on mortgage holders, given gilt yields have an impact on swap rates, which guide lenders’ mortgage offers. Corporate bond yields have shot up even for investment grade companies, considered to be low risk, adding to worries that companies needing to refinance soon or borrow more to cope with rising input costs could struggle to make repayments.

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To finance higher borrowing to pay for the tax cuts, an extra £72.4bn in debt sales are now planned for the current financial year alone. On top of this, the Bank of England plans to sell about £40bn of bonds over the next year to wind down its quantitative easing programme.

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Good morning, and welcome to our rolling coverage of business, the world economy and the financial markets.

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In a stinging attack, the International Monetary Fund has urged Liz Truss’s government to reconsider its tax-cutting plans to prevent stoking inequality.

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In rare public criticism of a leading global economy, the Washington-based fund said Kwasi Kwarteng’s mini-budget risked undermining the efforts of the Bank of England to tackle rampant inflation amid the cost of living emergency.

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It said a fiscal policy announcement planned by Kwarteng for 23 November presented an “opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high income earners”.

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Keir Starmer, leader of the opposition Labour party, said the IMF’s criticism shows how serious the situation is. He told LBC Radio:

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The IMF statement is very serious and it shows just what a mess the government have made of the economy and it’s self-inflicted, this was a step they didn’t have to take.

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On the markets, sterling is on the backfoot again, slumping as much as 1% to around $1.06, while the dollar has hit a fresh 20-year high as rising global interest rates stoked recession fears. The pound fell to an all-time low of $1.0327 against the dollar on Monday morning, and had traded around $1.1300 before Friday’s mini-budget.

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Seen as a safe haven, the dollar rose 0.5% against a basket of major currencies to hit a new peak of 114.7 in Asian trade. The yield on benchmark US 10-year government bonds also climbed, to 4% for the first time since 2010, peaking at 4.004%.

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Moh Siong Sim, a currency strategist at Bank of Singapore, told Reuters:

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It’s a combination of the spillover from the UK… where the gilt yields have gone ballistic. And that has spilled over into other developed market bond markets, so there’s a bit of a ricochet effect.

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And of course… this is against the backdrop of a very determined message by the Fed to do whatever it takes to bring inflation down.

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The Bank of England is likely to deliver a “significant policy response” to the UK’s tax cuts, its chief economist Huw Pill said on Tuesday afternoon. But Pill also argued that the Bank should wait until its next scheduled meeting in the first week of November (rather than through an emergency rate hike).

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Truss and Kwarteng apparently disagreed over how to deal with the crash in sterling. Downing Street denied that there was a row.

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However, Whitehall sources said there was talk within the civil service of an argument between the prime minister and chancellor at their meeting on Monday morning, and Sky News said Truss had been resisting Kwarteng’s suggestion that a Treasury statement was needed to calm the markets.

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The Agenda

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  • 7.45am BST: France Consumer confidence for September (forecast: 80)

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  • 8.15am BST: ECB president Christine Lagarde speech

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  • 9am BST: Italy business and consumer confidence for September (forecasts: 102.1 / 95.1)

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  • 9.15am BST: Bank of England deputy governor Jon Cunliffe speech

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  • 1.30pm BST: US trade for August

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  • 3pm BST: US Pending home sales for August

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  • 3.15pm BST: US Federal Reserve chair Jay Powell speech

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Filter Beta

Du kan läsa mer av Starmers kommentarer på vår Politics Live Blog, med Andrew Sparrow.

Starmer är för närvarande i BBC Radio 4:s Today-program och pratar om IMF:s kritik av Storbritanniens skattesänkningar, ett sällsynt ingripande från fonden från Washington och oron på marknaden.

Detta speglar det faktum att regeringen helt har tappat kontrollen över ekonomin.

Detta är en regering som har tappat kontrollen över ekonomin och för vad? Ge skattelättnader till dem som tjänar hundratusentals pund medan arbetande människor måste betala mer i priser. Det här är den värsta av alla situationer som vårt land befinner sig i.

Starmer: November uttalande “alldeles för långt” för att granska skattesänkningar

Sir Keir StarmerLabourledaren sa att hans bolån med rörlig ränta hade stigit med flera hundra pund. Han sa till LBC radio i morse:

Så många människor med bolån kommer att vara riktigt oroliga för vad som händer eftersom de vet vad det betyder för deras budgetar – priserna går upp.
Vi tittar alla på grafen och ser pundet falla, men det är ingen abstrakt graf. Detta återspeglas i folks bolån etc. och folk är väldigt, väldigt oroliga denna morgon.

Han sa att regeringen måste definiera “hur de tänker lösa problemen de har skapat”, i ett uttalande från november [on 23 November] “Alldeles för länge” för att se över situationen.

Han sa också att hans parti var mer enat och självsäkert än det hade varit på flera år och att folk på Labour-konferensen i Liverpool “kunde känna något i luften”.

Och vad de känner i luften tror jag är en förändring – för det är klart att den regering vi har har gjort en total röra av ekonomin och här har ni Labourpartiet lugnt, försiktigt och tryggt som ger sig i kast med att lägga ut alternativ. planer för vår ekonomi och våra offentliga tjänster.

Labourledaren Sir Keir Starmer lyssnar på en talare på den tredje dagen av Labourpartiets konferens i Liverpool
Labourledaren Sir Keir Starmer lyssnar på en talare på den tredje dagen av Labourpartiets konferens i Liverpool Foto: Christopher Furlong/Getty Images

Storbritanniens huspriser kan falla med 10% till 15%, varnar analytiker och mäklare

Ray Bulger, från bolånemäklaren John Charcol, har förutspått en 10%-ig nedgång i brittiska huspriser nästa år, medan analytiker har varnat för att priserna kan falla med så mycket som 15%.

Bolger säger att kollapsen på guldmarknaden, och risken att räntan stiger till 6% till nästa sommar “gör det mycket svårt att veta var man ska prissätta bolåneprodukter.” Det råder ingen tvekan om att detta kommer att påverka bostadsmarknaden. Han berättade för BBC Radio 4s Today-program:

Vi kan förvänta oss en betydande nedgång i bostadspriserna, kanske 10 % nästa år.

Även om jag just nu inte tror att vi kommer att se många fler tvångsförsäljare… det kommer definitivt att påverka människors möjlighet att köpa.

Analytiker på Credit Suisse varnar för att högre räntor, stigande inflation och risken för en lågkonjunktur kan få lägenhetspriserna att sjunka mellan 10 % och 15 %. Andrew WishartEn senior tillgångsekonom på Capital Economics varnade också för en liknande nedgång.

Den höjning av marknadsräntan som redan skett kommer att pressa bolåneräntan till minst 6 % och minska omfattningen av lån som långivare kan erbjuda. Den resulterande minskningen av köpkraften gör en betydande nedgång i lägenhetspriserna oundviklig.

Hundratals bolåneaffärer gjordes av banker och byggbolag, inklusive HSBC och Santander.

Gilt yields svävar på sin högsta nivå sedan finanskrisen 2008

Karantänens ofinansierade skattesänkningar på 45 miljarder pund, som främst gynnar de rika, har underblåst rädslan för ett upplåningsintag och fått statsobligationer att krascha sedan i fredags. Försäljningen pressade upp avkastningen – räntan på statsskulden – som rörde sig omvänt till priserna.

Räntan på det 10-åriga referensindexet, som brittiska statsobligationer kallas, backade något men svävade runt 4,39 %, upp kraftigt från 3,1 % före fredagens minibudget.

Susanna StreeterEn senior analytiker inom investeringar och marknader på Hargreaves Lansdown, förklarar:

[Yields] De nådde sin högsta nivå sedan finanskrisen 2008, vilket sätter press på bolåneinnehavarna, med tanke på att guldräntorna påverkar swapräntorna, som styr långivares bolåneerbjudanden. Räntorna på företagsobligationer har skjutit i höjden även för företag med investeringsgrad, som anses vara lågrisk, vilket ökar farhågor om att företag som snart behöver refinansiera eller låna mer för att klara av stigande insatser kan ha svårt att göra återbetalningar.

För att finansiera högre upplåning för att betala för skattesänkningen planeras nu ytterligare 72,4 miljarder pund i skuldförsäljning bara för innevarande räkenskapsår. Bank of England planerar att sälja cirka 40 miljarder pund i obligationer under nästa år för att stänga det kvantitativa lättnader program.

Inledning: Pundet faller efter att Internationella valutafonden uppmanar Storbritannien att ompröva skattesänkningen

God morgon och välkommen till vår rullande bevakning av affärer, den globala ekonomin och finansmarknaderna.

I en svidande attack ringde Internationella valutafonden Liz TrussDen israeliska regeringen kommer att ompröva sina skattesänkningsplaner för att förhindra ojämlikhet.

I en sällsynt offentlig kritik av en ledande global ekonomi, sa den Washington-baserade fonden Quasi KvartengFöretagets minibudget riskerade att undergräva Bank of Englands ansträngningar att hantera den skenande inflationen mitt i en nödsituation med levnadskostnader.

Den sade att ett finanspolitiskt tillkännagivande planerat av Kwarteng den 23 november utgör “en möjlighet för den brittiska regeringen att överväga sätt att ge mer riktat stöd och att omvärdera skatteåtgärder, särskilt de som gynnar höginkomsttagare”.

Keir StarmerLedaren för oppositionspartiet Labour sa att Internationella valutafondens granskning visar hur allvarlig situationen är. Han sa till LBC radio:

Internationella valutafondens uttalande är mycket allvarligt och det visar exakt vilken röra regeringen gjorde i ekonomin och den gjorde sig själv, det var ett steg de inte borde ha tagit.

På marknaderna var pundet återigen på bakfoten och föll med 1 % till cirka 1,06 dollar, medan dollarn nådde en ny 20-årshögsta nivå när stigande globala räntor underblåste rädsla för recession. Pundet föll till en lägsta nivå på 1,0327 dollar mot dollarn på måndagsmorgonen, handlade runt 1,1300 dollar före fredagens minibudget.

Ansett som en fristad steg dollarn 0,5 % mot en korg av större valutor för att nå en ny topp på 114,7 i handeln i Asien. Räntan på 10-åriga amerikanska statsobligationer steg också till 4 % för första gången sedan 2010 och nådde en topp på 4,004 %.

Moh Siong Simvalutastrateg på Bank of Singapore, sa till Reuters:

Det är en kombination av spridning från Storbritannien… där förgyllda skördar har blivit ballistiska. Och det spred sig över till andra utvecklade obligationsmarknader, så det finns lite av en rikoschetteffekt.

Och naturligtvis… detta är mot bakgrund av ett mycket beslutsamt budskap från Fed att göra allt som krävs för att sänka inflationen.

Bank of England förväntas ge ett “betydande politiskt svar” på brittiska skattesänkningar, säger dess chefekonom En pillerkrok sa tisdagseftermiddagen. Men Peel hävdade också att banken borde vänta på sitt nästa planerade möte den första veckan i november (snarare än genom en nödräntehöjning).

Truss och Kwartang var tydligen oense om hur de skulle hantera kraschen i pund. Downing Street förnekade att det fanns bråk.

Whitehall-källor sa dock att det talades i civilförvaltningen om ett argument mellan premiärministern och kanslern vid deras möte på måndagsmorgonen, och Sky News sa att Truss motsatte sig Kwartengs förslag att ett uttalande från finansministeriet behövdes för att lugna marknaderna.

dagordning

  • 7:45 BST: Franska konsumenternas förtroende för september (prognos: 80)

  • 8:15 BST: Tal av ECB:s ordförande Christine Lagarde

  • 9:00 BST: Italiens företags- och konsumentförtroende för september (prognos: 102,1 / 95,1)

  • 9.15 BST: Tal av Bank of Englands vice guvernör John Cunliffe

  • 13:30 BST: USA-handel för augusti

  • 15:00 BST: I USA väntar husförsäljning i augusti

  • 15:15 BST: Tal av amerikanska centralbankens ordförande Jay Powell