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Fundamental Archives |
Written by Lloyds TSB |
Jul 29 10 04:03 GMT
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Daily Financial Market Outlook
Wednesday's testimony by the Bank of England MPC members to the Treasury Select Committee highlighted the wide range of views about the risks surrounding the UK economic outlook. One of the risks is the renewed weakness in the housing market as one of the reasons why any discussion of policy tightening is far too premature and further easing may yet be required to assure that growth momentum is sustained. House price indices have began to roll over in the past few months and leading indicators, such as mortgage approvals and net mortgage lending, suggest no immediate respite on the horizon. In June, we expect both series to have remained subdued, with approvals slipping to 47k and net mortgage lending declining to £1.1bn.
In the eurozone, the focus will be on the publication of the European Commission economic confidence readings which we expect to show very little change in the overall regional sentiment in the month of June. While in Germany, the latest labour market data are expected to indicate that unemployment was fairly static in July as companies remain reluctant to take on labour given the uncertain global economic outlook.
Chart: UK mortgage approvals expected to weaken in the months ahead
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