Home » Futures markets suggest UK and European shares to begin the day with moderate gains
Signs of further slowdown in Chinese economy as China’s Central Bank cuts rates.
UK House Prices experience largest monthly drop in two and a half years
Gloom deepens over Eurozone economies
Futures markets suggest UK and European shares to begin the day with moderate gains
A slew of Chinese data has been released showing the Asian giant’s economy lagging behind forecasters’ expectations. Industrial production, retail sales, fixed-asset investment all came in below estimates, whilst youth unemployment reached a record level of 20%. China’s central bank lowered interest rates on a series of key money-market instruments, making a reduction in the rates charged by leading Chinese banks likely when they set their monthly rates next week.
China’s economy is suffering from ongoing Covid lockdowns and a fragile property market. Developers reported lower rates of investment into new building projects whilst sales of new homes dived by 31% in the year to end-July.
In the UK, property website, Rightmove reported that asking prices in August fell by the most for two and a half years. August is a month that often sees a setback with buyers in holiday mode, but this year’s 1.3% August dip is the largest monthly drop for some while. Rightmove’s Tim Bannister said the dip was most pronounced in London and top-end properties and said indicators were pointing to a continuing cooling of the market.
Rightmove said that over the last twenty years, the average price of properties had risen by 134% to £365k, outstripping a 76% gain in average wages and a 93% rise in the RPI. In a sign of how the rising cost of living is hitting home, not least through higher interest rates, Rightmove reported that the average monthly mortgage payments for first time buyers with a 10% deposit had breached £1,000 for the first time.
Bloomberg have polled economists on their views of the prospects of growth in the Eurozone economies and found that contributors now see 60% chance of a recession in the next 12 months, up from 45% in their previous survey, and just 20% in a survey taken before the invasion of Ukraine by Russia. Inflationary pressures mean that the economists still expect the European Central Bank to continue raising rates, with a half-point rise seeming likely in September.
Phoenix Group plc has reported that half-year cash generation has risen 9% to £950m and the group now expects to hit the top end of earlier estimates for the full year of £1.3bn – £1.4bn. The group, which specialises in acquiring books of older Life Assurance policies and reducing their operational costs to release capital and earnings, says it was performing strongly, with a Solvency II surplus of 186%, above the top of its target range. New business written in the period will deliver an incremental £430m of long-term cash generation, more than double the previous year’s run-rate. The group announced a 3% dividend increase and flagged a further 2.5% increase at the full year as likely.
AstraZeneca reports that its Enhertu drug, produced jointly with Japan’s Daiichi Sankyo, had been proven to offer statistically significant and clinically meaningful progression-free survival amongst breast cancer patients with HER2-positive disease that was either inoperable or had already begun metastasising (spreading) compared to current treatments.