RT.com
22 Jan 2023, 13:43 GMT+10
Average home prices could fall by up to 10% this year, Lloyds Bank predicts
British house prices, which have been on a downward trend recently, will fall by up to 10% this year, according to Lloyds Bank CEO Charlie Nunn, citing higher mortgage rates and the impact of the cost-of-living crisis.
He told CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, that the UK is facing a mild recession this year, with a GDP fall of about 0.1%. According to Nunn, unemployment will stay strong and "that's more because of the constraints on the supply side, interest rates about 4% and a recovery coming into 2023."
"The other challenge a lot of our customers are focused on is house prices and we do see house prices softening about 8-10% this year," he said.
The British housing market has been under pressure following former prime minister Liz Truss' disastrous economic plan. Known as the mini-budget, the plan, which was revealed in September, sent British financial markets into freefall and pushed up borrowing costs. The economic plan eventually resulted in the replacement of Truss with Rishi Sunak.
Meanwhile, the Bank of England (BoE) continued to hike interest rates aggressively in order to rein in double-digit inflation. The regulator said that the country was entering its longest recession on record.
Inflation hit 10.7% in November, and the BoE has hiked rates at nine consecutive policy meetings, to lift its main rate from 0.1% to 3.5%. Economists say that further increases will follow in the coming months.
The Office for Budget Responsibility (OBR) had warned earlier that British households face their sharpest fall in living standards on record. Nunn said that Lloyds was seeing a "tale of two stories."
"First of all, there is a relatively small but really important group of customers with mortgages and also without who are going to struggle to make ends meet in the cost of living. That's about 1% of customers we can see in the UK and we really need to focus on supporting them," he said.
"We're seeing a much larger set of customers having to adapt their spending and adapt to both higher costs of living and higher mortgage spend, but there still is real resilience in businesses, in households and in individuals at the higher income levels in the UK and strong spending we're seeing going through," Nunn added.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Milwaukee Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Milwaukee Sun.
More InformationEVERGLADES, Florida: Over the weekend, a diverse coalition of environmental activists, Native American leaders, and residents gathered...
BEIJING, China: China's national soccer team may struggle to stir excitement, but its humanoid robots are drawing cheers — and not...
]LONDON, U.K.: A World Health Organization (WHO) expert group investigating the origins of the COVID-19 pandemic released its final...
DOVER, Delaware: California Governor Gavin Newsom has taken legal aim at Fox News, accusing the network of deliberately distorting...
FRANKFURT, Germany: Germany has become the latest country to challenge Chinese AI firm DeepSeek over its data practices, as pressure...
TORONTO, Canada: Harvard University and the University of Toronto have created a backup plan to ensure Harvard graduate students continue...
GOP leaders are determined to advance Trump's signature agenda. But the bill's complexity, internal party fractures and Democratic...
Scientists have widely agreed that the persistent rise in greenhouse gas emissions since the Industrial Revolution is the primary driver...
BEIJING, June 28 (Xinhua) -- Here are the latest Chinese sports headlines from the past week: 1. China's Wang Xinyu finishes runner-up...
Event to raise funds to benefit Heritage Hill; registration closes Aug. 1 The Green Bay Packers are set to host the 2025 Alumni Sporting...
Hell keep at it, and itll come Mike Spofford Gary from Cross Plains, WI I clicked on that link of Wes in the downpour. I forgot...
Michael Hull Over the course of the next few weeks, we will be taking an in-depth look at the Bengals' 2025 opponents. The Bengals...