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Welcome to the News in Brief, a daily summary of the latest banking and finance news.
UK MORTGAGE LENDING PREDICTED TO FALL IN 2024
Lending for house purchases will fall by eight per cent in 2024, according to forecasts published by [UK Finance] today.
UK Finance said it expected lending for house purchases in the UK would fall from £130 billion in 2023 to £120 billion next year, due to higher interest rates and household costs making it harder for people to afford a mortgage (BBC News). Meanwhile, external remortgaging is expected to fall eight per cent to £60 billion, and buy-to-let purchase lending will fall 13 per cent to £7 billion.
UK Finance also forecast that mortgage arrears could rise from 105,600 cases by the end of this year to 128,000 in 2024, however, it does not expect possessions to rise equally (Sky News).
CENTRAL BANKS TO LEAVE INTEREST RATES ON HOLD
Central banks are expected to keep interest rates on hold this week, despite concerns over high inflation and growing expectations of sharp cuts in borrowing costs next year (The Guardian). The US Federal Reserve, Bank of England and European Central Bank are expected to keep rates at their current high levels, with the expectation that rates will be cut next year.
In addition, in its latest outlook on the UK economy, the CBI has said that the Bank of England’s base rate will continue to stay at 5.25 per cent for at least two more years (The Times). The forecast is based on projections showing that consumer price inflation will not reach the Bank’s two per cent target until the third quarter of 2025.
NEWS IN BRIEF
Rents on new tenancies have risen by a record 10.2 per cent across Britain, data from Hamptons has revealed (The Times).
It is expected that this year the average UK household will spend £550 on festive goods and services, up £70 from last year, data from the Centre for Economics and Business Research has shown (The Guardian).
Applications to list on the London Stock Exchange have fallen to the lowest level in at least six years, according to data from the Financial Conduct Authority (The Telegraph).
The Federation of Small Businesses has called on the Financial Conduct Authority to intervene over its concerns about banking practices in relation to business loans (Financial Times).
11.12.23
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