By DUNCAN SCOTT 03/09/2010
A round up of the latest major economic news and developments from the last week.
UK House Prices decline
This week Nationwide reported house prices fell for the second straight month in August with a decline of 0.9%. They, along with Halifax, believe the residential property is stagnating, a slightly more down beat view that prices were stabilising when I reported house prices in July. The recent declines are mainly attributed to more sellers entering the market, giving potential buyers more choice, and therefore bargaining power. This will be the first time since February 2009 that prices have fallen for two consecutive months.
US Payroll figures climb
Today we saw the release of data that showed US has added more jobs than forecast in August. Private payrolls climbed 67,000, well ahead of the estimates of nearer 40,000. The market reacted favourably as there were concerns the figures would indicate to a double dip recession. However, overall employment in the US fell 54,000 and the unemployment rate increased to 9.6% as companies are still cautious about hiring, especially in the service sector.
FTSE positive streak continues
The FTSE 100 closed on Friday with a 6 day positive streak as investors were cheered on by the US payroll reports. The index closed up to 5,428, which amounts to nearly a 4% gain for the week. The market does not seem to be reacting to BoE Deputy Governor Charles Bean’s statement that the UK economy is fragile on news that UK Services growth has slowed in August.
Russia extends export ban
Russia, the world’s third largest grower of wheat this week extended the export ban it imposed on August 15. Russia is suffering from its worst drought in 50 years, and has extended the ban into the new year. Wheat prices have risen for 3 successive days, and prices have now almost doubled since June. The rising prices have sparked riots in Mozambique, similar to those in Egypt in 2008, but prices now a still a long way short of the levels seen then.
And finally,
It’s been a busy week in the aviation world. British Airways play a pre-recorded message to passengers by accident, indicating that the plane was about to crash, while a Ryanair flight had to make an emergency landing in Germany after a woman spilt a hot cup of tea over her lap. The lady later decided to continue her journey to Poland by train.