Good News Week Although the UK has a Shortage of Bricks!
Figures showing a more buoyant economy than originally anticipated, has led to a spate of good news at a time of year when often the rotten November days are full of doom and gloom.
Government borrowing is down
With more people working than ever before income tax receipts are up. Also Corporation Tax receipts have improved as more companies publish better than expected results. An improving Housing market has boosted stamp duty revenue. Mortgage lending for the year is up 33%, although October experienced a small fall in mortgage lending.
The substantial increase in University Tuition fees has also helped to reduce Government expenditure.
Inflation in October was 2.2%
[pullquote_right]Although business lending in October was down, September had been a five year high, and it is hoped October was just a blip.
This was much lower than projected and much closer to the 2% target that the Government and Bank of England are aiming for. The greatest factor influencing the drop in inflation was a reduction in Fuel costs. We are now seeing the lowest fuel prices at our pumps for two years. Much of the reason for this is a strong pound, but a mild start to the winter will also have helped. Today we have seen wholesale oil prices drop in the wake of the Iran Nuclear deal. This has sent out a calming message in the Middle East and has helped to reduce tension. In six months time if all goes well Iran will be allowed to increase its oil sales to the market, and this could also again help to reduce wholesale prices.
Help to buy scheme
A number of building Societies have indicated that they will join in the Governments Help to Buy Scheme in the New Year. Some lenders are also introducing their own schemes. All this should help the housing market to grow next year. However, we are still not building enough new houses a year. The demand is for two hundred thousand new homes a year, but we just don’t seem able to build much more than half this figure! Builders are already reporting that there is a shortage of skilled workers, most notable are plumbers and roofers. In addition there also appears to be a shortage of Bricks!
Overall, the good news should boost confidence, and that is just the message we want to see today.