Haver Analytics
Haver Analytics
United Kingdom
| Jun 01 2023

UK: Weaker messages from the housing market and the manufacturing sector

Today’s data from the UK covering the housing market and the manufacturing sector suggest the economy is rolling over. The good news is that inflationary pressures appear to be easing at the same time.

The key elements of note from these data releases were as follows:

• The Nationwide house price index fell by 3.4% in the year to May, the biggest annual decline since July 2009. Average prices now stand at around 4% below their August 2022 peak.

• This news chimed with data from the Bank of England showing net mortgage lending slumped in April. Mortgage lending specifically declined from net zero in March to £1.4 billion of net repayments in April. Excluding the COVID era, this is the lowest level on record.

• That data chimed too with the accompanying news for net mortgage approvals, which fell from 51,500 in March to 48,700 in April.

• As for manufacturing this latest S&P Global manufacturing purchasing manager’s Index (PMI) fell to 47.1, down from 47.8 in April, although upwardly revised from the earlier flash estimate of 46.9. The details of this report were equally soggy, showing falling new orders and sharply rising finished inventories.

• Brighter news, however, emerged on the inflation front. For example, there were signs of further easing in supply chain pressures. And this was accompanied by a sharp retreat in input and output price pressures as well. In fact, average input costs actually fell for the first time since early 2016 (see chart).

  • Kritika joined Haver Analytics as a Junior Economist in August 2022. She writes commentary on UK macroeconomic trends and provides client support of Haver’s data content and proprietary software.

    From 2019 to 2022 Kritika worked in Financial Accounting and Capital Markets. Prior to working in financial services, she was a research assistant at Frontier Economics within the public policy practice and has also interned at HM Revenue and Customs.

    Kritika holds an MA in Economics from the University of Manchester and a BA in Economics from India.

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