41. Weekly Newsletter
UK house price woes
UK house prices have dropped for the sixth month in a row according to mortgage provider Halifax. The fall is a result of high interest rates deterring people from borrowing money and this massively reduces the ability to buy homes. The house price fall began in April and this trend has continued between August and September by 0.4%. Furthermore, the prices have fallen by 4.7% according to prices this time last year which is the steepest annual fall since 2009.
This trend has come about as a result of the rising interest rate which has been increased 14 times since December 2021 by the Bank of England to 5.25%. Resultantly, the average rate on two-year fixed mortgage has risen to 6.67% making it very expensive to buy houses during this period as mortgage approvals dropped by almost 10%. Struggles in the property market have had a domino effect on other areas of the economy as home related goods and services have also fell such as furniture.
The UK’s front page news cycle over the last seven days has covered a wide range of topics with no single issue dominating the headlines. Rishi Sunak’s tax freeze is set to bring in an extra £40 billion as rising inflation has increased the number of people paying the levy for the first time. In other news, UK based pharmaceutical company (GSK) signs a multi-billion-pound deal with China’s largest vaccine company and UK’s Rwanda migration policy comes under Supreme Court scrutiny. Some of the newspaper front pages from this week were:
- Financial Times-UK’s Rwanda migration policy comes under Supreme Court scrutiny
- Financial Times- Labour vows to reinstate 2030 new petrol car sales ban
- The Times- Rishi Sunak’s health kick gives Big Tobacco a headache
- The Guardian- Britons cut back on eating out and takeaways to save for festive splurge
- The Times- Risk managers not prepared for crisis, Bank of England warns
- Financial Times- UK and Italy call for tougher action across Europe on irregular migration
British multinational, GSK and one of the top ten largest pharmaceutical companies in the world, has signed a deal with China’s largest vaccine company, Zhifei. The company have agreed to buy £2.5 billion worth of the shot ‘Shingrix’, which is used for older people, over the next three years. The multi-billion-pound deal is part of a number of western pharmaceutical companies looking to increase their hold in China’s lucrative market with GSK announcing the deal is part of their efforts to double the revenue from Shingrix to £4 billion by 2026.
UK smoking ban
Rishi Sunak announced plans to make it illegal for anyone born on or after January 1, 2009, to buy cigarettes which would essentially raise the smoking age by a year each year until the entire population is banned from smoking. A lobby group called ‘Forest’ which is funded by the tobacco industry has stated that this will just mean that people looking to smoke will just “buy tobacco abroad or from illicit sources”. The UK government have also announced plans to restrict purchasing of vapes and make them less appealing to the youth as the UK have plans to reach a 5% or lower smoking prevalence by 2030. These announcements to make the “first smoke-free generation” has coincided with a fall in share prices of almost 3% for Imperial Brands and 1.5% for British American Tobacco.