London Report: Housing market stalls and GDP is re-evaluated

HOUSING data showing fewer mortgage approvals and only modest price increases looks set to show that the UK’s booming property market is finally slowing.

Bank of England figures out today are forecast to show that mortgage approvals fell to 66,000 in August from 66,569 in July and 67,085 in June.

The numbers are well below the 76,295 figure from January. And although it is above the 61,914 count from May, when tighter mortgage rules had just been introduced, it suggests the market has flattened out.

Further data tomorrow, from the Nationwide House Price Index, is expected to show that prices are no longer rocketing, as they were earlier this year. The forecast month-on-month price increase for September is 0.5 per cent – lower than the 0.8 per cent rise for August.

Tomorrow will also bring the release of substantially revised GDP data for the UK, which will be based on the European System of Accounts (ESA) 2010 rather than the current ESA 1995. The new data also include estimates of the contribution to the economy of the charitable sector, the sex industry and illegal drugs.

Howard Archer of IHS Global Insight said: “Our suspicion is that there could well be some upward revisions, although the quarter-on-quarter growth rates through 2013 and the first half of 2014 already look very decent. It has certainly been the Bank of England’s suspicion that the economy has performed better than reported in recent quarters and the revisions already announced since 2008 have been markedly upward overall.”

Purchasing managers’ indexes for manufacturing, construction and services are due later in the week. While construction activity has remained strong in September, growth in manufacturing appears to have slowed from earlier in the year. The service sector is also likely to show robust growth.

The corporate calendar begins today with reports from Aberdeen Asset Management, Compass and MITIE. Tomorrow’s updates are due to come from Euromoney, Harvey Nash, ICAP, KCOM, RPC, Saga and Wolseley.On Wednesday Avingtrans, ITE and Sainsbury will update the markets, followed by news on Thursday from Carillion, Domino’s Pizza, Electrocomponents and Ted Baker. easyJet and Dunelm report on Friday.