The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Construction sector expected to grow at decent clip this year even after March's pre-election wobble: The construction sector is expected to grow at a decent clip this year even after March’s pre-election wobble.
Growth in the construction industry in Britain slowed down in March, as uncertainty over May's general election weighed on sentiment. The monthly Markit/CIPS UK construction purchasing managers' index declined 2.3 points in March to 57.8, having reached a four-month high in February, and remained below 61.8, the average for 2014 as a whole. According to data released on Thursday, all three main areas of construction activity lost momentum in March, with civil engineering registering the worst performance of the three sub-sectors, while housing was the best-performer of the three. Companies delayed spending decision ahead of May's general elections, leading to employment figures rising at their slowest pace since December 2013. Markit's monthly survey found that a sharp decline in the availability of sub-contractors hiked their charges by the largest amount since the survey began in April 1997, while costs were also affected by shortages of material supplies. However, confidence in the industry was growing, as construction firms said they were more confident about the next 12 months than at any point since February 2006. "There are grounds for optimism on the construction sector over the coming months, and it is notable that the purchasing managers showed confidence in the sector spiking to a nine-year high in March," said Howard Archer, chief UK and European economist at IHS Global Insight. "Economic growth is expected to be healthy overall which should be supportive to commercial construction activity and civil engineering."
UK manufacturing activity expanded further in March, continuing on a recovery path as producers in the country start the year on on a bright note. The seasonally adjusted Markit/CIPS Purchasing Manager's Index (PMI), which collates factory bosses' responses to questions on topics such as their level of new orders, climbed to an eight-month high of 54.4 in March, ticking higher from 54.0 in February. The PMI has now remained above the neutral 50.0 mark for 24 consecutive months. Moreover, the average reading for the opening quarter as a whole (53.8) was the best growth outcome since the second quarter of last year. Wednesday's headline reading was ahead of expectations and comes a day after fourth quarter 2014 GDP was revised higher to 0.6% on the previous three months, from a preliminary estimate of 0.5%, driven by rising house prices and robust consumer spending. The manufacturing data will be welcomed by the Conservative party ahead of May's general elections. "Encouragingly, the new export orders balance rose to its highest level in seven months, suggesting that the recent rise in the pound is not acting as too big a constraint for now," said Vicky Redwood, economist with Capital Economics.
RBS sees better-than-expected price for its Aldgate office block: Bids for one of the Royal Bank of Scotland’s office buildings in Aldgate have entered a second round, with the taxpayer-owned lender set to gain a better-than-expected payout.
U.K. economy grew at fastest rate for nine years in 2014: The British economy grew at its fastest pace for nine years in 2014 as GDP figures showed the economy expanded by a stronger than expected 2.8% last year, according to the Office for National Statistics.
UK total business investment climbed in 4Q 2014 In the UK, the final total business investment recorded a rise of 3.70% in 4Q 2014, on a YoY basis. In the prior quarter, total business investment had advanced by a revised 7.40%. The preliminary figures had indicated an advance of 2.10%. UK total business investment declined in 4Q 2014 On a QoQ basis, the final total business investment in the UK dropped 0.90% in 4Q 2014. Total business investment had risen by a revised 0.30% in the prior quarter. The preliminary figures had indicated a drop of 1.40%. UK current account deficit fell in 4Q 2014 Current account deficit in the UK fell to £25.30 billion in 4Q 2014, compared to a revised current account deficit of £27.70 billion in the previous quarter. Market expectations were for the country's current account deficit to narrow to £22.00 billion. UK GDP advanced more than expected in 4Q 2014 The final gross domestic product (GDP) climbed 3.00% on a YoY basis in the UK, in 4Q 2014, higher than market expectations for an advance of 2.70%. The preliminary figures had indicated an advance of 2.70%. GDP had advanced 2.60% in the prior quarter. UK index of services rose as expected in January In January, the index of services in the UK advanced 0.80% on a monthly basis, at par with market expectations. The index of services had risen by a revised 0.90% in the October-December 2014 period. UK business barometer recorded a rise in March In March, the Lloyds business barometer in the UK registered a rise to 53.00, compared to a reading of 45.00 in the prior month. UK index of services unexpectedly fell in January On a monthly basis, in the UK, the index of services unexpectedly dropped 0.20% in January, compared to an advance of 0.60% in the previous month. Markets were anticipating the index of services to advance 0.30%.
Galliford Try Plc (GFRD.L) Announced that it has reached agreement with Frasers Property on the next phases of the Riverside Quarter residential development in Wandsworth. Frasers has appointed Galliford Try to construct the next three phases of the project, worth £69 million in total to the business. Phases 5C and 5D consist of two new blocks, which will include 99 apartments for sale and an additional 50 affordable homes. Phase 6A will create a new 13 storey block providing 51 new apartments for sale and 36 affordable homes together with additional commercial units and extensive landscaping, in a much sought after residential area in South West London. Galliford Try Executive Chairman Greg Fitzgerald commented: "Long-term relationships with valued clients are a key part of our construction strategy and we are delighted to have been able to reach agreement with Frasers to continue our partnership on such a prestigious residential development in a prime London location."
U.K. consumer confidence at a 13-year high: Consumer confidence soared to a 13-year high in March, with Britons preparing to splash their cash over the long Easter weekend
Britain’s next government must tackle shortage of housing for elderly rather than focusing on first-time buyers: Britain’s next government must tackle a shortage of housing for the elderly rather than focusing on first-time buyers, according to one of the country’s leading builders
McCarthy & Stone profits soar on baby boomer spending: McCarthy & Stone saw first-half pretax profits soar 76% to £32 million as the U.K.’s largest housebuilder for older people continues to benefit from the country’s rising population of affluent baby boomer homeowners.
BoE stress tests to focus on Asia and the Eurozone: A sharp economic downturn in Asia and the Eurozone, falling commodity prices and illiquid financial markets will form the backdrop to the Bank of England’s stress tests for the U.K.’s biggest banks this year.
Homebuyers shrug off election uncertainties: Banks and building societies handed out mortgages at the fastest pace in six months in February, despite uncertainty created by the forthcoming election
UK net lending to individuals advanced as expected in February In February, net lending to individuals in the UK rose £2.50 billion, in line with market expectations. Net lending to individuals had registered a rise of £2.40 billion in the previous month.
UK consumers' spirits soared in February on the back of improved perceptions of the economy's recent performance, the results of a widely followed survey revealed. News of a sharp increase in the proportion of those respondents who believe now is a good time to undertake major purchases will also boost spirits at the Old Lady on Threadneedle Street, economists said. Coming on the heels of high and rising employment, together with negligible inflation, it "reinforces belief that there is little likelihood that consumers will start to delay purchases in anticipation of falling prices," commented Dr. Howard Archer, chief UK+European economist at IHS Global Insight. The Gfk NOP index for Britain, which was carried out on behalf of the European Commission, rose to a reading of +5.6 for March, after a print of +3.9 in February and +3.0 in January. That was comfortably ahead of the barometre's long-run average value of -9.2. Consumers' inflation expectations for the coming twelve months also rose.
Wealthy tenants from Russia, Ukraine, Nigeria and China are pushing up high-end rents in the capital by paying for an entire year of tenancy upfront, a new study has suggested. Upmarket lettings agency EJ Harris said the number of wealthy foreign investors paying annual rents upfront has doubled in the past year, from one in 10 tenants to one in five, as fears over stamp duty and a mansion tax have "turned vendors into landlords and buyers into tenants". According to the report, central London's £2m-£20m housing market has "stalled", replaced by a "buoyant" lettings market. Labour has threatened to introduce a mansion tax on houses worth more than £2m, while measures introduced as part of the Autumn Statement mean homes worth more than £2m incur seven per cent stamp duty. The government has also introduced rules meaning homes worth more than £500,000 bought within a corporate envelope - used by many wealthy individuals to hide their identities on the Land Registry - are subject to stamp duty of 15 per cent. A typical would-be tenant for a two-bedroom flat in the West End will pay their landlord more than £200,000 upfront, the report said, including £3,500 a week rent - £182,000 in total - and a £21,000 deposit. However, tenants have been "happy" to pay their landlords upfront for rents as high as £10,000 per week, it added. "At this level of the marketplace upfront rental payments can exceed half a million pounds". Upfront hotspots Mount Street, in Mayfair, is the top London address for upfront rental payments, with more than 80 per cent pre-paid, which EJ Harris said was down to the number of tenants looking for properties in the area vastly exceeding supply. Residential lettings in the street have now his an average of £1,400, up 25 per cent since 2013. Nearby Dover Street is also a hotspot for upfront payments, with 70 per cent of tenancies secured their paid in advance. Hot on its heels are Eton Place in Belgravia, Tervor Square in Knightsbridge and St James' Square, where 60 per cent of tenancies are paid upfront, and Wardour Street, Charlotte Street, Cadogan Square and New Cavendish Street, where half of renters paid before their moved in.
Mortgage approvals soared to a six-month high in February, data released by the Bank of England today shows. Threadneedle Street said mortgage approvals rose to 61,760 in February, which was up from 60,707 in January. This marks the third consecutive month of growth since approvals hit a 17-month low of 58,944 in November. Despite the gains mortgage approvals still remain below January 2014's 74-month high of 75,453. "There is mounting evidence that housing market activity is edging up from its recent lows," Howard Archer, chief UK and European economist at IHS, said. "This underpins our belief that house prices will rise by around five per cent in 2015. However, while mortgage approvals for house purchases rose for a third month running to a six-month high in February, they were still 18.1 per cent below the peak level seen in January 2014."
Drop in house sales Figures from Land Registry show that the number of completed house sales in England & Wales fell by 11% in December, totalling 70,470 in the month, a marked drop from the 79,569 recorded in December 2013. The number of high-value property sales (those over £1m) also decreased, falling by 4% to 929, down from 967 a year earlier. However, the overall decline marks a smaller annual fall than the rate of -16% recorded the previous month, with housing transactions increasing on a monthly basis, up from 69,668 in November 2014. The data also revealed positive repossession figures, with repossessions in England & Wales down by 38% on an annual basis, totalling 654 in December compared with 1,062 in December 2013. London was the region with the greatest fall in repossession sales, recording an annual drop of 54%.
Duncan Smith must spell out £12 billion cuts: CBI: Britain’s leading business group has criticised the Conservatives for failing to specify where cuts to welfare would come if it wins re-election in May.
International consortium buys up Bankside scheme for £308 million: A consortium of British and international investors has bought up a £1 billion office and residential development on London’s South Bank for £308 million.
Construction confidence in Scotland reaches a record high: Confidence in the Scottish construction sector has reached a record high, according to a report published.
Surveyors merge as Allied snaps up Murray and Muir: Two Scottish chartered surveying firms have merged in a move which comes as the recovery of the property market north of the Border continues to gather pace.
Investors pour billions into luxury student flats: Russian billionaires are among a number of new investors buying up swathes of U.K. student accommodation, pushing sales this quarter to a record £3.3 billion.
Councils caught on the hop could stall housebuilding: Housebuilding in many parts of Britain could be delayed by the lack of preparation among three quarters of local authorities for changes to the planning system that come into force next month.
Deflation risk quite low in the UK, stated BoE's Broadbent The Bank of England’s (BoE) deputy governor for monetary policy, Ben Broadbent opined that the recent slowdown in annual inflation in the UK had been driven largely due to drop in oil prices. He further said that the risk of deflation was very low in the UK and expects consumer price inflation to rise "quite steeply" in early 2016.
UK house prices rose less than expected in March In March, on an annual basis, the non-seasonally adjusted house prices in the UK advanced 5.10%, less than market expectations for a rise of 5.30%. In the prior month, house prices had registered a rise of 5.70%. UK house prices rose less than expected in March In March, the seasonally adjusted house prices advanced 0.10% on a MoM basis in the UK, compared to a drop of 0.10% in the prior month. Market expectations were for house prices to climb 0.20%.