- The underlying consumer picture remains strong with retail sales increasing by 0.6% in September. However, manufacturing remains in recession.
- With employment at near historical highs and unemployment at near historical lows the labour market remains very strong. However, recent data suggest we may have neared the peak.
- Despite the continued strength in the labour market earnings growth remain subdued and currently stand at 3.4%.
- RPI inflation fell from 2.9% in August to 2.8%, while HICP inflation was unchanged at 1.4%. This means inflation has been above target for eleventh consecutive month RPIX.
- It was a close call last month as the MPC voted 5-4 in favour of keeping base rates at 3.5%. This has promoted renewed fears of an early rate rise, with the markets expecting a 25bp increase in November and aggressive rate rises thereon.
- According to the Nationwide, house prices rose by 1% during September, or 15.5% over the year. Halifax recorded slightly higher growth of 18.6%.
- It was yet another record month for lending. Gross lending totalled £25.4bn and net lending £9.4bn in September.
- Approvals have remained very strong throughout 2003 and reached a massive £33bn in September. With approvals of £85bn in the third quarter of 2003, gross lending in quarter four could be the region of £80bn
- Although falling back slightly from its May peak, the remortgage market remains active and accounted for 44% of all loans.
- Transactions have fallen off in the last two quarters and we now expect total sales in 2003 to be around 15% lower than last year.
- The proportion of first time buyers has been gradually declining over the last two years. This is unsurprising given the increase in the median income multiples.
