By Mark Jones, director of Carmarthen-based Clay Shaw Butler chartered accountants and business consultants. This column appears in the Pembrokeshire Herald, the Carmarthenshire Herald and the Llanelli Herald.
British house prices grew by a weaker than expected 2.0 percent in August.
That’s according to the mortgage lender Nationwide Building Society.
House prices slipped back to a level last seen in June, when prices rose at their slowest in five years.
The slowdown is the latest sign of how the housing market has slowed since the 2016 Brexit vote.
Economists taking part in a poll for the news agency Reuters had expected prices to rise by a stronger 2.7 percent.
In monthly terms, prices fell by 0.5 percent in August from July.
The Reuters poll had pointed to a 0.1 percent monthly increase.
Nationwide’s measure of house prices was showing increases of about 5 percent a year shortly before the 2016 referendum decision to leave the European Union.
Britain’s overall economy has slowed since the vote.
Nationwide said it continued to expect house prices to rise by 1 percent in 2018.
A Reuters poll published earlier this week showed economists expect house prices to increase nationally by 2 percent this year and next.
Meanwhile, British shop prices rose for the first time in more than five years in August.
But prices rose by less than the broader measures of inflation as retailers continued to battle for consumers.
Shop prices edged up by 0.1 percent in year-on-year terms, ending a run of 63 months of falling prices, the British Retail Consortium (BRC) said.
The BRC pointed to the impact of a hot, dry summer on food prices and higher international oil costs.
Britain’s widely-followed consumer price index stood at 2.5 percent in July.
But competition among supermarkets and pressure from online retailers has generally pushed down prices in shops.
While retailers were trying to keep a lid on increases, inflationary pressures would grow if Britain fails to secure a deal to smooth its exit from the European Union in seven months’ time, BRC chief executive Helen Dickinson said.
“If that does happen, retailers will not be able to shield consumers from price increases.”
The value of the pound has fallen since April on concern among investors about the risk of a no-deal Brexit which could cause delays at borders and hamper the broader economy.
The BRC said food prices picked up speed to rise by an annual 1.9 percent in August while non-food deflation eased to 1.0 percent, the weakest fall since April 2013.
The Bank of England this month increased interest rates for only the second time since the global financial crisis, saying the plunge in Britain’s unemployment rate would create inflation pressure, even as the economy grows only slowly.
Finally, a tax calendar reminder for Wednesday, September 19.
PAYE, Student loan and CIS deductions are due for month to 5th September 2018.
This deadline is relevant to employers who have made PAYE deductions from their employees’ salaries and to contractors who have paid subcontractors under the CIS.
Employers are required to make payment to HMRC of the income tax, national insurance and student loan deductions. Contractors are required to make payment to HMRC of the tax deductions made from subcontractors under the CIS.
Where the payment is made electronically the deadline for receipt of cleared payment is Friday 21st September 2018 unless you are able to arrange a ‘Faster Payment’ to clear on or by Saturday 22nd September 2018. In year interest will be charged if payment is made late. Penalties also apply.
You can find out more about money matters on the Clay Shaw Butler website (under our news for business section) –
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