This morning’s UK report revealing a 0.5 per cent month-on-month increase in house prices in September counteracted less-impressive construction data and saw the Pound advance on its American counterpart.
The Pound Sterling to US Dollar Exchange Rate was in the region of 1.5973 as of 12:40 GMT.
The surge in value took property prices to a record last month as government schemes to help first time buyers onto the market took effect.
The figures, compiled by LSL Property Services Plc, also revealed that jumping home values in London are leading the nationwide recovery.
On the year home prices were up 12 per cent.
In a statement issued with the data LSL Director David Newnes commented; ‘We’ve seen banks ease criteria on mortgages for people with small deposits, which has opened the door to new buyers who have spent years on the outside looking in. Demand has increased significantly in a short space of time, and raced ahead of the supply of homes.’
After the report was published the Pound gained on the US Dollar and edged away from a five-week low against the Euro.
1 US Dollar is currently worth 0.6260 pence
However, the British currency went on to fluctuate as a later report showed that UK construction output dipped in August.
Office of National Statistics data revealed a 0.1 per cent decline in output. Economists expected an increase of 0.8 per cent.
But while some areas of the sector reported a drop in activity, house-building was up 1.6 per cent and output was still up 4 per cent year-on-year.
Markit’s chief economist Chris Williamson said of the construction sector; ‘The turnaround so far this year has been quite remarkable. Having been contracting at an annual rate of 12.4 per cent last December, the industry is now growing at a rate of 4 per cent. The increasingly broad-based upturn (in construction) suggests that companies are beginning to increase their capital investment, which bodes well for the sustainability of the economic recovery.’
The Pound retained its modest gains against the US Dollar in the aftermath of the data release, although market analyst Eimear Daly did state that ‘Further gains for Sterling may be limited because expectations for robust economic recovery are not consistent with the real fundamentals. The UK has a structural weakness.’
With the US University of Michigan confidence index due out at 14:55 GMT the GBP/USD pairing could experience additional fluctuations before the end of the local session.
Next week UK data to be aware of includes the nation’s producer/consumer price index, jobless claims and employment change figures and the retail sales report.
Economists are expecting the unemployment rate to hold at 7.7 per cent, but as the Bank of England has now linked the unemployment rate with interest rates a surprising result is sure to trigger considerable movement.
Current Pound Sterling (GBP) Exchange Rates:
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The Pound Sterling/US Dollar Exchange Rate is currently in the region of: 1.5973 >
The Pound Sterling/Euro Exchange Rate is currently in the region of: 1.1773 <
The Pound Sterling/Australian Dollar Exchange Rate is currently in the region of: 1.6854 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9150 <
The US Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6260 <
The Euro/Pound Sterling Exchange Rate is currently in the region of: 0.8494 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5929 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5206 >
(As of 12:40 GMT)
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