Strength in the UK housing market has driven the FTSE 100 higher during today’s session with the benchmark equity index adding some 30 points by 13:00 BST. The Royal Institution of Chartered Surveyors have released data showing that UK house prices were rising at their fastest pace in seven years helping to lift overall investor sentiment.
Whilst house prices don’t feed directly into the Consumer Price Inflation measure, the resurgence in the housing market has done little to help lower inflation – (a measure the BOE seeks to lower before withdrawal of stimulus). Despite this, CPI eased slightly in July, helped by lower airfares and clothing costs. The consumer price index fell to 2.8 percent last month, down from 2.9 percent in June and in line with economists’ forecasts.
Along with the FTSE 100, European headline indices are trading broadly higher, boosted a report showing that German investor confidence increased more than forecast. The ZEW Centre for European Economic Research’s index of investor and analyst expectations rose to 42 in August.
Output at euro zone factories rose broadly in line with expectations in June, driven by a jump in durable goods production, reinforcing expectations the bloc was on track to exit recession in the second half of the year. Industrial production in the 17 countries using the euro was up 0.7 percent in June from May slightly below analysts’ expectations for a 0.8 percent increase.