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House price growth slows to weakest pace in 6 years due to Brexit fears.

Growth was only 0.5% in December, down from 1.9% in November and the lowest rate since February 2013, according to a Nationwide survey. Concerns about the impact of Brexit, many businesses are unsettled with many holding back on investment and expansion plans. The Bank of England's worst case scenario, a disorderly no deal Brexit, would lead to a 30% fall in houseprices, 5.5% inflation rates and an economic contraction greater than the 2008 financial crisis. This sentiment is against a backdrop of employment growth, stronger wage growth and low borrowing costs, which makes the situation more disappointing.

At present, house prices are falling, the average price fell to £212,281 in December from 214,044 in November and Nationwide expects any increase during 2019  to be in the low single digit area.The overall picture in 2018 in England (+0.7%) has been driven by low declnes in and around London. The North(+3%), Wales(+4%), Northern Ireland(+5.8%) and Scotland(+0.9%) all showed better figures. It is also felt that changes in stamp duty rates in 2014 and tougher rules on borrowing impacted the market

(The Times Jan 5 2019 )

Wall Street Soars and US jobs boom at what price?

Most stock markets in the US have risen significantly in December after a turbulent year, following a sell off period in November. US Federal Reserve chairman stated that it would be 'listen sensitively to stock markets and be patient with its interest rate policy'. However, how much of this boom is driven by lower taxes and other business benfits driven by Trump at the cost of a huge increase in the $ trillions US deficit.

Recent reports from business show redcutions in forecasts ( Apple cut revenue forecast for the first time in 16 years, blaming a slowdown in Iphone sales in Cihna) and the unemployment rate rose to 3.9% from 3.7% in November.

Trump's chaotic style of leadership and insistence on funding for the much derided Mexican Wall, combined with a government shutdown over budget agreements and the House plans to move further on impeachment action, will further dent confidence in US business and international influence

Where next??

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Jury is out for Retail high street performance.

It is expected that retail reports will show weaker trading than desired over the Christmas period following a poor year generally in the high strret. M&S for example will report a fall in underlying sales in food and clothing, in line with market expectations. Most other major retailers and in particular Debenhams, which had a poor 2017, will do well to show growth after a tough November, poor weather conditions for shopping and Brexit confusion. Several retailers have issues profit warnings, but Next and John Lewis seem to be bucking the trend and have reported better sales figures than expected. 

The continued impact of online purchasing is a factor that the HighStreet will need to allow for in the way they manage their businesses  going forward. The additional softness in spending across all channels and accelerating footfall challenges will add further pressure to the market to become more effcient in the Brexit era.

(The Times 5th Jan 2019)

 

Quotes of the month

Computers make very fast, very accurate mistakes ( Anon)

A professional is someone who can do his best work when he doesn't feel like it ( Alistair Cooke, media personality )

By working faithfully 8 hours  a day, you may eventually become the boss and work 12 hours per day.( Robert Frost)