By DUNCAN SCOTT 06/08/2010
A round up of the latest major economic news and developments from the last week.
UK banks return to profit
This week, there was a flurry of activity in the UK banking sector with Lloyds, Barclays, RBS and HSBC all reporting upbeat figures for the first half of 2010. Although the stock market responded positively to the news, with all of the banks trading higher at the end of the week, the headlines for individuals and small businesses read differently as, according to the Bank of England, lending is down in both May and June.
UK Interest rates remain at 0.5%
The Bank of England (BoE) has voted to hold interest rates for the 18th consecutive month, at the record low level of 0.5%. The BoE Committee does not see inflation as a serious concern at this time, even though the Consumer Price Index is well above the 2% target, at 3.2% in July. This is a view we have held for some time and we continue to believe inflation will not be an issue, in the short term at least.
House prices continue to rise
This week saw the release of Halifax’s UK house prices for July which saw a rise of 0.6%, and the average house now costing £167,425. The figures suggest that we are now seeing a stabilisation in the residential property market and not the beginning of a sharp correction since the peak earlier this year. However, figures still indicate a lower average house price than 3 years ago and sales remain low.
US employment
The US labour market confirmed that the recovery in the US is slow to take hold, with private companies adding 71,000 jobs in July, following a rise of 31,000 in June. With the Federal Reserve Chairman, Ben Bernanke, describing the outlook as ‘unusually uncertain’, stock markets fell as a result.
Finally, this week saw the results of the annual taxi opinion poll were announced, which saw London’s friendly and knowledgeable drivers come out on top. This means London’s taxi drivers won the poll for a third straight year, beating off competition from New York’s yellow cabs, despite being the most expensive.