Week ahead: City eyes housing stats and BoE governor Bailey remarks

The UK’s red hot housing market is set to revert to more normal territory driven by the cost of living crunch chilling demand for homes, fresh data released this week that will be closely watched by the City.

London’s premier FTSE 100 index has rebounded after suffering bruising losses of late caused by investors around the world ditching shares on recession fears.

The index gained 2.74 per cent to finish last week at 7,208.81 points, while the mid-cap domestically-focused FTSE 250 index, which is more aligned with the UK economy, climbed a shade over one per cent, but closed out the week still below the 20,000 mark.

Fresh mortgage approvals data published by the Bank of England on Friday are expected to show higher interest rates cooling house purchases.

The City thinks approvals edged back to 64,200 from 66,000. Property sales and prices have surged since the start of the pandemic.

“Weaker consumer confidence and the real disposable incomes shock should push the housing market into more ‘normal’ territory,” Sanjay Raja, senior economist at Deutsche Bank, said.

Credit card spending may have jumped in May, fuelled by households taking on debt to plug budget gaps caused by rising living costs.

Governor Andrew Bailey on Wednesday delivers remarks at a conference hosted by the European Central Bank. 

Central bankers and markets will be keeping a close eye on international economic announcements this week, with new US GDP and eurozone inflation figures out on Wednesday and Friday respectively.

Revised first quarter GDP figures are also out from the Office for National Statistics on Thursday. A downgrade will intensify fears the UK economy is headed into reverse.

Fintech Wise posts final results on Tuesday, as does greeting card retailer Moonpig on Wednesday.