RT.com
22 Jan 2023, 18:13 GMT+10
Average home prices could fall by up to 10% this year, Lloyds Bank predicts
British house prices, which have been on a downward trend recently, will fall by up to 10% this year, according to Lloyds Bank CEO Charlie Nunn, citing higher mortgage rates and the impact of the cost-of-living crisis.
He told CNBC on the sidelines of the World Economic Forum in Davos, Switzerland, that the UK is facing a mild recession this year, with a GDP fall of about 0.1%. According to Nunn, unemployment will stay strong and "that's more because of the constraints on the supply side, interest rates about 4% and a recovery coming into 2023."
"The other challenge a lot of our customers are focused on is house prices and we do see house prices softening about 8-10% this year," he said.
The British housing market has been under pressure following former prime minister Liz Truss' disastrous economic plan. Known as the mini-budget, the plan, which was revealed in September, sent British financial markets into freefall and pushed up borrowing costs. The economic plan eventually resulted in the replacement of Truss with Rishi Sunak.
Meanwhile, the Bank of England (BoE) continued to hike interest rates aggressively in order to rein in double-digit inflation. The regulator said that the country was entering its longest recession on record.
Inflation hit 10.7% in November, and the BoE has hiked rates at nine consecutive policy meetings, to lift its main rate from 0.1% to 3.5%. Economists say that further increases will follow in the coming months.
The Office for Budget Responsibility (OBR) had warned earlier that British households face their sharpest fall in living standards on record. Nunn said that Lloyds was seeing a "tale of two stories."
"First of all, there is a relatively small but really important group of customers with mortgages and also without who are going to struggle to make ends meet in the cost of living. That's about 1% of customers we can see in the UK and we really need to focus on supporting them," he said.
"We're seeing a much larger set of customers having to adapt their spending and adapt to both higher costs of living and higher mortgage spend, but there still is real resilience in businesses, in households and in individuals at the higher income levels in the UK and strong spending we're seeing going through," Nunn added.
For more stories on economy & finance visit RT's business section
(RT.com)
Get a daily dose of Entertainment Sun news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Entertainment Sun.
More InformationPhoto credit: Ercin Erturk / Anadolu AgencyThe death toll from Monday's massive 7.8 magnitude earthquake in Turkey and Syria has ...
WASHINGTON D.C.: In a sign of future political battles over record numbers of illegal crossings under Democratic President Joe Biden, ...
MOSCOW, Russia: Russian state-run TASS news agency has reported that a US woman was detained and fined by a Russian ...
ISLAMABAD, Pakistan - Former President General (retd) Pervez Musharraf died in a Dubai hospital on Sunday at the age of ...
JERUSALEM - Israel on Sunday announced plans to build a new town on the Gaza border .The town, temporarily named ...
CHICAGO, Illinois: After an ice storm ravaged states from Texas to West Virginia, this week, airlines canceled over 1,800 flights ...
Washington [US], February 7 (ANI): Matthew McConaughey is all set to voice late singer-actor Elvis Presley in upcoming Netflix animated ...
The Russian imperial court loved to have fun and knew how to do it in style - almost every monarch ...
Mumbai (Maharashtra) [India], February 7 (ANI): Actors Sidharth Malhotra and Parineeti Chopra starrer romantic drama film 'Hasee toh Phasee' turned ...
Mumbai (Maharashtra) [India], February 7 (ANI): As 'Malang' clocked three years, actor Kunal Kemmu took a stroll down memory lane ...
Washington [US], February 7 (ANI): Mexican-American actor Salma Hayek revealed that Hollywood blocked her from starring in a comedy for ...
new york - British author Salman Rushdie said he finds it 'very difficult' to write after being stabbed last year, ...