The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
UK mortgage approvals remained steady in June, signaling a stable housing market despite the highest interest rates in 16 years.
Key Takeaways:
Mortgage Approvals: The Bank of England (BOE) reported that 60,000 new mortgages were approved in June, similar to the 60,100 approvals in May. This marks the strongest level in 1½ years.
Lending on Properties: Total lending secured on properties rose to £2.7 billion (RM16.17 billion) from £1.2 billion the previous month.
Market Stability: The UK property market has shown resilience, picking up pace in recent months after a slight dip last year. This stability defies forecasts of a sharp drop in prices expected due to increased mortgage costs.
Interest Rates and Home Buyer Confidence: The BOE is considering when to lower interest rates, which could further boost confidence among home buyers.
Industry Insights: Nathan Emerson, CEO of Propertymark, noted that the housing market's momentum has sustained itself. He expressed optimism that a newly elected government with an ambitious housing agenda could further increase market confidence. Additionally, a potential rate cut by the BOE could provide a further boost.
Upcoming Data: Nationwide Building Society is set to release house price data later this week, with economists expecting a third consecutive month of price increases in July.
The steady mortgage approvals and rising property lending indicate a stabilizing UK housing market, offering positive signs for both home buyers and the broader economy.
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