UK house prices rebound modestly in May; investigation launched into Nationwide’s takeover of Virgin Money – business live | Business

Nationwide also dug into its data and found that past general elections do not appear to have generated house price volatility or resulted in a significant change in house price trends.

Their Chief Economist Robert Gardner says:

“Overall, the prevailing trends held just before, during and after the UK General Election. Broader economic trends seem to dominate any immediate impacts related to the election.

It’s a busy morning for Nationwide Building Society.

As well as their latest house price datawe’ve just learned that UK competition authorities have opened a merger investigation into the £2.9bn takeover of rival Virgin Money.

The Competition and Markets Authority (CMA) says it is considering whether the deal – the biggest since the financial crisis – would significantly reduce competition in the UK banking sector.

The CMA is seeking views from interested parties until 14 June (details here).

Virgin Money shareholders last week voted in favor of Nationwide’s bid, despite one investor claiming the takeover was “likely to sell shareholders very short”.

Aside from a shareholder vote, the deal still needs formal approval from city regulators Financial Conduct, leadership Authority and Cautious Regulation Authorityas well as a signature from CMA.

Good morning and welcome to our ongoing coverage of business, financial markets and the global economy.

Whether people feel richer can be a key factor in where they put their ticks at the ballot box.

And those lucky enough to own a house got a little richer this month, new figures show, while a separate report shows living standards have fallen for more than a decade.

Creditor In the whole country just reported that UK house prices rose 0.4% month-on-month in May, ending a two-month period of falling prices.

This lifted the annual rate of house price inflation to 1.3% from 0.6% in April, with the average house price now £246,249.

However, prices have risen some lenders raised mortgage rates this spring – although spending is below the spike in the months since the 2022 minibudget fiasco, which made such damage to the popularity of the Conservative Party.

In the whole country reports that the market is showing some resilience. Their Chief Economist, Robert Gardnersays:

“The market appears to be showing signs of resilience in the face of continued affordability pressures following the rise in long-term interest rates in recent months. Consumer confidence has improved markedly over the past few months (see chart below), supported by solid wage gains and lower inflation.

The election campaign is unlikely to significantly disrupt the housing market; Movement to the right reported this week that 95% of people planning to move say the election will not affect their plans.

However, the wider economic picture is that the UK is suffering from weak income growth since the Great Recession.

The Institute for Fiscal Studies reported this morning that average earnings rose by just 6% between 2009-10 and 2022-23; before the 2008 crisis, economists would have expected growth of 30% over that 13-year period.

The IFS warns there is no “silver bullet”, but reforms to tax, planning, education and more could be essential to the UK’s long-term prospects.

Mubin Haq, chief executive officer of abrdn Financial Fairness Trust, says:

“Unfortunately, the standard of living has deteriorated for more than a decade.

On a number of measures, the UK performs poorly, especially compared to other rich countries. The danger is that stagnation will become the new normal. It’s in no one’s interest and it’s jeopardizing too many futures and too many lives.

The key to any future government will be a renewed drive to tackle hardship and improve living standards.

Also due today

New data from the Bank of England will show how many mortgages were approved last month, another indicator of the health of the housing market.

Global investors are bracing for the latest US PCE inflation data, which measures price changes across a wide range of consumer spending. A strong PCE report could throw further cold water on hopes of an early US rate cut, while a weak reading could put them back in play…

The agenda

• 7am BST: National House Price Index for May

• 7am BST: German retail sales

• 7.45am BST: France Inflation Report

• 9.30am BST: UK mortgage approvals and consumer credit statistics

• 10am BST: Eurozone inflation report

• 13.30 BST: Canada Q1 GDP report

• 13.30 BST: US PCE Inflation Index