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A pleasant surprise- Property prices rose almost two percent in January
A pleasant surprise for home owners announced today is the 1.9% jump in the cost of property in January 2009. The increase, the first monthly rise in prices since February 2008, means that the average UK home is now worth £163,966. Following ten consecutive months of house price falls meaning that the average property price had fallen from £196,465 to £160,861 in December of last year, an 18.1% decrease in value over the year.
This first sign that property market in Great Britain may be stabilising, although sales still remain at a very low level. Estate agents do report that buyers, mostly those in search of a bargain, are slowly returning to the market.
Considerably less optimistic was a report issued yesterday by Mervyn King governor of the Bank of England warning that the UK is "in a deep recession" and that the "magic wand" of rate cuts may not provide the remedy. .
In the Bank's latest forecast for economic growth and inflation, predictions are that the UK economy will decline more sharply than thought, particularly in the first half of the year. The report also stated that "there is a significant risk that the recession will be even longer and deeper than expected" with the UK economy thinking by four percent for the year June 2008-June 2009.
On the company front, media group Daily Mail and General Trust (DMGT) reported better-than-expected trading despite showing any real confidence over future advertising revenues.
DMGT, reported revenues for the fourth quarter up two percent to £568 million, helped by a stronger dollar.
On the downside, a spokesman for DMGT stated that UK advertising revenues for the period were down 27% on last year in its regional arm, Northcliffe. To offset losses, the group is undertaking further cost-cutting, hastened by the news that Northcliffe had experienced "two very slow weeks" for the first two weeks of the year, resulting in a 40% drop in January advertising revenue compared to 2008.
The group, who cut 6% of its UK workforce in the three months to the end of December, announced that consultations had begun with UK staff regarding the possibility of further job cuts, however were reluctant to announce a figure for their expected redundancies. A spokeswoman for the company did however state that the cuts would be "predominantly" at Northcliffe. DMGT recently sold the Evening Standard London daily to Russian oligarch Alexander Lebedev
On the FTSE, most U.K. stocks suffered a decline with the financial companies showing the heaviest losses. This was mostly due to insecurities flamed by lack of detail in the U.S. bank rescue plan. This lack of detail is felt to be hampering a revival in credit markets and the global economy.
The knock-on effect was felt by Barclays Plc who dropped 5.7 percent to 106.9 pence, and Royal Bank of Scotland Group Plc whose share value declined 5.9 percent to 22.4 pence.
The financial adviser Hargreaves Lansdown Plc retreated by 2.3 percent after the announcement that assets managed by the company dropped 9 percent in the second-half of 2008 as their shares fell to 172 pence.
Manufacturing the world’s largest brands of household cleaners obviously has its advantages. The Reckitt Benckiser Group Plc who has that claim to fame announced a fourth- quarter increase in profit of 36 percent. Analysts estimate that new products such as Vanish Intelligence detergent were behind the dramatic increase in sales and profits. Their shares rose by 4.2 percent to 2,733 pence on the results.
The FTSE 250 index fell by 0.60% or 38.69 points to 6457.59 while the FTSE 100 finished the session down by 1.31 per cent, or 55.42 points, at 4,178.84
Sterling fell slightly against the dollar and the Euro and rose slightly against the Japanese Yen and the Swiss Franc:
- Pound/Japanese Yen 127.94
Wall Street shares had a good day on Wednesday's trading showing gains after Congress gave the green light to a $789 billion stimulus package.
The Dow Jones Average rose 50.65 to 7939.53 with the NASDAQ up 5.77 points to 1530.5.
The U.S. dollar rose against most of its rivals Wednesday as dissatisfaction over a U.S. bank-rescue plan kept investors running to safe-haven assets.
The agreement on the bill, which includes tax cuts, spending on infrastructure projects and relief for people who lost their jobs or homes, sent U.S. stock indexes. A stimulus bill, promoted by President Barack Obama's administration, also continued its advance in the Senate.
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