On Friday, there were two pieces of economic data which were worthy of our attention. The Halifax house price index for September showed that UK house prices fell by 1.4% last month, which is the sharpest fall since April 2018. It follows a 0.2% fall in August and was much lower than the 0.2% increase economists had predicted. The average price for a home in August was £225,995 and, on an annual basis, prices were 2.5% higher.
Sterling continued where it left off on Thursday by climbing higher against the dollar and broke through the $1.31 mark. Against the euro, the pound hovered around the €1.1350 mark throughout the day which eclipsed Thursday’s two-month high against the single currency. It’s quite remarkable that reports of a source contacting Reuters to say the bloc welcomed a fresh Brexit proposal is enough to strengthen the pound. Investors are clearly hoping for a breakthrough and any hint of a possibility is enough of a wave crest to sail on.
There is nothing on the economic data schedule today or tomorrow in the UK. Things pick up on Wednesday, when we will the balance of trade figures for August, the month-on-month GDP figures, construction and industrial output and manufacturing production. Combined, the releases should show us how the UK economy fared in August and we could see some sterling movements if there are some surprises.