subject: Growth In The Economy And Housing Prices [print this page] Figures recently released by the Office of National Statistics (ONS) show that the economy in the UK has grown by 0.5 per cent in the third quarter of 2011. This compares rather favorably to the 0.1 per cent increase which was recorded for the second quarter. This is coupled with news that both manufacturing and service sectors have reported noticeable growth in output.
The ONS was quick to qualify this by noting that the growth seen in the second quarter had been artificially tempered perhaps to something closer to 0.5 per cent by events that took place, such as the bank holiday that came about as a result of the Royal Wedding. As a result, these published figures for growth may be seen as consistent rather than being resurgent.
Howard Archer, spokesperson for HIS Global Insight, has described these UK growth reports as slightly above expectations. But there is still concern amongst the majority of analysts, who have highlighted the weaknesses in manufacturing. Mr Archer went on to stress that this is likely to be as good as it gets for some time to come.
However, James Knightley of ING Financial Markets, has warned that we may be in for negative growth in the final quarter of the year, despite the increased shopping around the festive season. This was later backed up by Victoria Cadman of Investec, who noted that a fairly soft fourth quarter of growth still looks to be on the cards.
In other news, Nationwide Building Society figures based on a sample of the building societys mortgage lending show that house prices have increased year-on-year for the first time in six months, last recording at 0.8 per cent.
But the bank still report that transaction levels are subdued and prices are flat. With a fairly sedate outlook for the UK economy, it has been suggested that housing sales may be set to fall again after a stronger six month period.
This comes as reports begin to reveal the pattern of house pricings across the country. Homes in and around London are holding their value, where as in other parts of the country these appear to be fluctuating, with the cheapest housing being found in the north of England.
