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You can find the current article at its original source at https://www.theguardian.com/business/live/2018/jun/27/uk-house-price-growth-falls-bank-of-england-financial-stability-business-live
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| John Lewis to close Waitrose stores as profits slump - business live | |
| (35 minutes later) | |
| More gloom from John Lewis chairman Charlie Mayfield: | |
| “It is very important that we feel the jeopardy of what is happening right now. | |
| John Lewis is briefing reporters about its plans now. | |
| Chairman Sir Charlie Mayfield warns that the retail slowdown isn’t a “blip”, and could continue for some time: | |
| This is not a blip and it's got plenty if road to run says John Lewis boss Charlie Mayfield of Hugh street's current difficulties | |
| Newsflash: John Lewis has warned that its profits will be substantially lower than a year ago. | |
| In the latest gloomy news to hit Britain’s retail sector, John Lewis admits that profits in the first half of the financial year could be close to zero. | |
| It is also planning to close a handful of small Waitrose stores - including one in Camden, two Little Waitrose outlets in Manchester and one in Birmingham. | |
| John Lewis saying doesn't expect any first half profits and annual profits to fall amid tough times on high st | |
| John Lewis Partnership gives a sober update this morning. Expecting full year profits to be "substantially lower" than last year. Half year profits "close to zero" . Is looking at shop closures, including offloading four Waitrose convenience stores and one supermarket. | |
| John Lewis profit will be "close to zero" this year amid heavy investment in service | |
| More to follow! | |
| Worries that Donald Trump will trigger a destructive trade war are weighing on the world’s stock markets again today. | |
| China’s benchmark CSI 300 index slumped by 2% today to a two-year low, leaving it firmly in ‘bear market territory’ (more than 20% below its peak in January). | |
| Other Asian markets also slipped, with the Hong Kong Hang Seng index down 1.8%. | |
| It’s been a bad few weeks for emerging market shares, as nervous investors pull money out. | |
| As this chart shows, the entire region is worryingly close to bear market territory: | |
| Bears looking almost in complete control across emerging markets. Index about just 4% away from entering a bear market. Reversal doesn't look like it's happening soon looking at steep downward slope on A/D line pic.twitter.com/cyusgZhUOq | |
| European markets are also on the back foot. Germany’s DAX has dropped by 0.75% this morning, as concerns that Trump might slap tariffs on European car imports mount. France’s CAC is down 0.5%. | |
| Things look better in London, though, where the FTSE 100 has lost just 10 points (-0.15%). | |
| Connor Campbell of SpreadEx says that “ongoing trade war concerns continuing to weigh on investors’ minds.” | |
| Economist Howard Archer of EY Item Club has spotted that UK house prices actually flatlined in the last three months, compared to the previous quarter. | Economist Howard Archer of EY Item Club has spotted that UK house prices actually flatlined in the last three months, compared to the previous quarter. |
| This is the first time that prices haven’t risen on a quarterly basis since the third quarter of 2012 - another sign that the market’s cooling. | This is the first time that prices haven’t risen on a quarterly basis since the third quarter of 2012 - another sign that the market’s cooling. |
| Archer says people are being cautious because interest rates could rise soon - making a mortgage less affordable: | Archer says people are being cautious because interest rates could rise soon - making a mortgage less affordable: |
| Housing market activity is expected to remain lacklustre as the extended squeeze on consumer purchasing power only gradually eases, confidence is relatively fragile and appreciable caution persists over engaging in major transactions. | Housing market activity is expected to remain lacklustre as the extended squeeze on consumer purchasing power only gradually eases, confidence is relatively fragile and appreciable caution persists over engaging in major transactions. |
| Potential house buyers may also be concerned that they are likely to face further interest rate hikes over the coming months (we believe the Bank of England is more likely than not to raise interest rates from 0.50% to 0.75% in August – although it could be delayed until November). Furthermore, house prices are relatively expensive relative to incomes | Potential house buyers may also be concerned that they are likely to face further interest rate hikes over the coming months (we believe the Bank of England is more likely than not to raise interest rates from 0.50% to 0.75% in August – although it could be delayed until November). Furthermore, house prices are relatively expensive relative to incomes |
| Worries over Brexit are keeping some potential housebuyers out of the market, keeping prices subdued, says Jonathan Samuels, CEO of the property lender, Octane Capital. | Worries over Brexit are keeping some potential housebuyers out of the market, keeping prices subdued, says Jonathan Samuels, CEO of the property lender, Octane Capital. |
| With Brexit on the horizon, households feeling the pinch and interest rate uncertainty lingering, a lot of prospective buyers are sitting tight. | With Brexit on the horizon, households feeling the pinch and interest rate uncertainty lingering, a lot of prospective buyers are sitting tight. |
| “Nationally, we’re witnessing the revenge of the regions, with the East and West Midlands in especially barnstorming form. Wales also has a significant spring in its step.”London is in a league of its own once again, but sadly, for homeowners in the capital, it’s the bottom league. | “Nationally, we’re witnessing the revenge of the regions, with the East and West Midlands in especially barnstorming form. Wales also has a significant spring in its step.”London is in a league of its own once again, but sadly, for homeowners in the capital, it’s the bottom league. |
| North London estate agent Jeremy Leaf says sellers need to be realistic about prices, particularly in his patch: | North London estate agent Jeremy Leaf says sellers need to be realistic about prices, particularly in his patch: |
| ‘On the one hand, the squeeze on incomes and unrealistic asking prices is reducing activity and confidence to move, particularly in price-sensitive areas such as London. | ‘On the one hand, the squeeze on incomes and unrealistic asking prices is reducing activity and confidence to move, particularly in price-sensitive areas such as London. |
| ‘On the other hand, the market continues to be supported by low interest rates and overall supply shortages, although we have found recently that listings and viewings are on the rise. This will translate into more sales if buyers and sellers recognise the new market realities.’ | ‘On the other hand, the market continues to be supported by low interest rates and overall supply shortages, although we have found recently that listings and viewings are on the rise. This will translate into more sales if buyers and sellers recognise the new market realities.’ |
| Samuel Tombs, chief UK economist at Pantheon Macroeconomics, reckons we’ll avoid a full-blown house price crash: | Samuel Tombs, chief UK economist at Pantheon Macroeconomics, reckons we’ll avoid a full-blown house price crash: |
| “Tight supply, a healthy labour market and a continued lengthening of mortgage terms - 30-year loans now are common - will help to prevent prices from falling outright. | “Tight supply, a healthy labour market and a continued lengthening of mortgage terms - 30-year loans now are common - will help to prevent prices from falling outright. |
| “But it is inevitable that house prices will grow at a slower rate than households’ incomes during a period of rising mortgage rates.” | “But it is inevitable that house prices will grow at a slower rate than households’ incomes during a period of rising mortgage rates.” |
| House prices in the North are closing the gap on their Southern cousins. | House prices in the North are closing the gap on their Southern cousins. |
| Northern property prices have risen by 3.3% in the last year, a vigorous performance compared to the South’s softer growth of just 0.5% (dragged down by London’s 1.9% decline). | Northern property prices have risen by 3.3% in the last year, a vigorous performance compared to the South’s softer growth of just 0.5% (dragged down by London’s 1.9% decline). |
| But.... that only makes a small dent in Britain’s housing divide. | But.... that only makes a small dent in Britain’s housing divide. |
| Prices in London, for example, are still more than 50% higher than in 2007 when the financial crisis stuck. In swathes of the North, though, prices are below those levels. | Prices in London, for example, are still more than 50% higher than in 2007 when the financial crisis stuck. In swathes of the North, though, prices are below those levels. |
| House prices growth is slowing in most parts of the UK, Nationwide reports. | House prices growth is slowing in most parts of the UK, Nationwide reports. |
| The Midlands has seen the strongest house price growth recently, followed by Wales and Scotland. | The Midlands has seen the strongest house price growth recently, followed by Wales and Scotland. |
| But while London lags behind, the average price in the capital (£469k) are still more than twice the national average (£215k). | But while London lags behind, the average price in the capital (£469k) are still more than twice the national average (£215k). |
| Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. | Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. |
| House price growth in the UK has fallen to its lowest level in five years, in the latest sign that the market is cooling. | House price growth in the UK has fallen to its lowest level in five years, in the latest sign that the market is cooling. |
| Nationwide, the building society, has reported that annual house price growth slowed to 2% this month. | Nationwide, the building society, has reported that annual house price growth slowed to 2% this month. |
| That’s the slowest rate since 2013, with the market dragged down by falling prices in the capital. | That’s the slowest rate since 2013, with the market dragged down by falling prices in the capital. |
| Nationwide UK house price indexannual change: 2%year to date: 2% pic.twitter.com/VkJhWznz3P | Nationwide UK house price indexannual change: 2%year to date: 2% pic.twitter.com/VkJhWznz3P |
| London was the weakest performing region in the last quarter, Nationwide reports, with prices down 1.9% year-on-year. | London was the weakest performing region in the last quarter, Nationwide reports, with prices down 1.9% year-on-year. |
| Robert Gardner, Nationwide’s chief economist, blames weak economic growth and tight household finances, saying: | Robert Gardner, Nationwide’s chief economist, blames weak economic growth and tight household finances, saying: |
| Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent. | Surveyors continue to report subdued levels of new buyer enquiries, while the supply of properties on the market remains more of a trickle than a torrent. |
| “Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. | “Looking further ahead, much will depend on how broader economic conditions evolve, especially in the labour market, but also with respect to interest rates. |
| “Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. | “Subdued economic activity and ongoing pressure on household budgets is likely to continue to exert a modest drag on housing market activity and house price growth this year, though borrowing costs are likely to remain low. |
| More details and reaction to follow... | More details and reaction to follow... |
| Also coming up today | Also coming up today |
| The Bank of England will highlight key threats to the UK economy when it presents its latest financial stability report this morning. | The Bank of England will highlight key threats to the UK economy when it presents its latest financial stability report this morning. |
| Governor Mark Carney is also facing questions over the Bank’s conduct and culture, after it emerged yesterday that two policymakers have run up almost £400,000 in travel expenses in the last couple of years. | Governor Mark Carney is also facing questions over the Bank’s conduct and culture, after it emerged yesterday that two policymakers have run up almost £400,000 in travel expenses in the last couple of years. |
| MPs called the expense ‘staggering’, as we covered in yesterday’s liveblog: | MPs called the expense ‘staggering’, as we covered in yesterday’s liveblog: |
| The criticism is mounting this morning.... | The criticism is mounting this morning.... |
| Wednesday’s Daily Telegraph: “Cabinet at war over ‘Project Fear mark two” #tomorrowspaperstoday pic.twitter.com/mW86Zxx5Zn | Wednesday’s Daily Telegraph: “Cabinet at war over ‘Project Fear mark two” #tomorrowspaperstoday pic.twitter.com/mW86Zxx5Zn |
| The stock markets are still edgy about the prospect of a US-China trade war. Shares have dropped again in Shanghai, but traders hope for a better day in Europe. | The stock markets are still edgy about the prospect of a US-China trade war. Shares have dropped again in Shanghai, but traders hope for a better day in Europe. |
| China leads Asia lower as Shanghai slides deeper into bear market https://t.co/vv0oLepAJB pic.twitter.com/Qm5ezXU7X5 | China leads Asia lower as Shanghai slides deeper into bear market https://t.co/vv0oLepAJB pic.twitter.com/Qm5ezXU7X5 |
| Retailers could also be under pressure today, as Britain runs low on beer! Not great timing, with the World Cup coming to the boil. | Retailers could also be under pressure today, as Britain runs low on beer! Not great timing, with the World Cup coming to the boil. |
| Plus, the oil price could be volatile as America puts pressure on other countries to stop buying oil from Iran. The latest oil inventory stats will show whether supplies are holding up. | Plus, the oil price could be volatile as America puts pressure on other countries to stop buying oil from Iran. The latest oil inventory stats will show whether supplies are holding up. |
| The agenda: | The agenda: |
| 10.30am BST: Bank of England financial stability report | 10.30am BST: Bank of England financial stability report |
| 1.30pm BST: US trade figures | 1.30pm BST: US trade figures |
| 3.30pm BST: US weekly oil inventory | 3.30pm BST: US weekly oil inventory |