Pound Sterling (GBP) Exchange Rate Outlook Declines on Halifax House Price Data

Published: Wednesday, 7 September 2016 14:00 BST - Written by John Cameron

STORY LINK Pound Sterling (GBP) Exchange Rate Outlook Declines on Halifax House Price Data

GBP/EUR, GBP/USD Exchange Rates Fall from Best Levels on UK House Price Data

The week started strongly for Pound Sterling (GBP) exchange rates as upbeat UK data reduced fears of life post-Brexit. However, both the GBP/EUR and GBP/USD exchange rates declined on Wednesday as UK house price data came in below forecasts.

The latest UK house price survey from leading domestic lender Halifax has provided further evidence of lingering uncertainty in the domestic property sector. The closely-monitored survey revealed that the average house price increased by almost 7% compared to twelve months earlier. However, the fall in the rate of increase from 8.4% in July to 6.9% in August heavily hints that UK economic participants are battening down the hatches and shelving plans to move house ahead of a period of turbulence in the local economy.

Brexit Vote Could Send House Prices Crashing and Weigh on Pound Sterling (GBP) Exchange Rates

The Pound Euro exchange rate fell from close to 1.20 to 1.18 after the report was published, while the Pound US Dollar exchange rate dropped below 1.34.

Halifax’s Housing Economist Martin Ellis interpreting the figures, noting that,

‘House prices in the three months to August were 0.7% higher than in the previous quarter; down from 1.5% in July. The annual rate of growth fell from 8.4% in July to 6.9%.’

House Prices Forecast to Drop in 2016

Ellis went on to observe that,

‘House price growth continued the trend of the past few months in August with a further moderation in both the annual and quarterly rates of increase. There are also signs of a softening in sales activity.’

Before summing up the situation thus,

‘The slowdown in the rate of house price growth is consistent with the forecast that we made at the end of 2015. Increasing difficulties in purchasing a home as house prices continued to increase more quickly than earnings were expected to constrain demand, curbing house price growth.’

Pound Sterling (GBP) Exchange Rates Fall on UK Production News

Elsewhere, there was further bad news Pound Sterling (currency : GBP) exchange rates with the publication of July’s UK Manufacturing Production data; a result of 1.7% was anticipated, so the print of 0.8% provided Sterling-watchers with considerable food for thought.

The downward revision to 0.6% for June’s counterpart figure heaped more pressure on the UK unit, sending the Pound Euro exchange rate down to an intraday low of 1.1875 GBP EUR earlier. Comments from Bank of England Governor Mark Carney in a set piece speech later this afternoon are forecast to heap further pressure on the Pound, particularly if he reiterates his negative post-Brexit tone of recent weeks.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Currency Predictions Daily Currency Updates Poun Forecasts