37. Weekly Newsletter
UK House Price Rise
Recent data from Nationwide shows that house prices grew at the fastest annual rate since December 2022. In August, the average price increased by 4.3% compared to the same month last year, bringing the average house price to just under £300,000. This puts the current average price only £1,000 below the record set in summer 2022, a time when house prices had surged by 22% over two years.
The recent increase has been driven by lower mortgage costs. In August, the Bank of England cut interest rates from 5.25% which has eased pressures on homeowners struggling to pay their mortgages. Amanda Bryden, head of mortgages at Halifax stated that “homeowners are feeling more confident thanks to easing interest rates” and Amy Reynolds, head of sales Antony Roberts has claimed “one small reduction in interest rates has translated into an instant response”.
Newspapers
Some of the British headlines from the past week are:
· Financial Times- ‘British Steel owner preparing to bring forward blast furnace closures’
· Financial Times- ‘Keir Starmer faces growing unrest over axing winter fuel payments’
· Financial Times- ‘UK councils face £4.3bn ‘black hole’ in financing next year, data shows’
· Financial Times- ‘Bank of London told investors it had ‘immediate’ need for regulatory capital’
· Financial Times- ‘England spent £40bn less on health assets than peer nations, report to say’
· The Times- ‘Bank of England bond sales could free up billions for Labour’
HM Revenue & Customs struggles to deal with small businesses
HMRC estimates that small businesses account for 66% of tax evasion amounting to approximately £4.4 billion each year as this has risen over the last few years. Keir Starmer has pledged to raise an extra £5 billion each year by the end of the decade by dealing with tax evasion. The National Audit Office has claimed many businesses are under declaring their income or filing for insolvency to avoid paying taxes before relaunching the same business under a different name. The NAO has stated that HMRC have “lacked an effective strategic response”. HMRC has replied by stating that they raised a record £843 billion in tax revenues last year and that they are working as hard as possible to “tackle tax evasion in retail and online services”.
