Key Statistics: 9 Sept 2014

Economy

• The Bank of England has held UK interest rates at 0.5% and has also left its quantitative easing programme unchanged at £375 billion. However, minutes from the previous month’s meeting showed that two policy makers voted for a rise, for the first time in three years. In contrast the ECB has cut its benchmark rate to just 0.05% and introduced new stimulus measures in an effort to lift economic growth in the Eurozone. 

• Consumer Prices Index (CPI), the headline rate of inflation grew by 1.6% in the year to July 2014, down from 1.9% in June. The long standing inflation measure, RPI, recorded a faster rise in prices with the index rising by 2.5% over the year to July.  

• Retail sales volumes remain on an upward trend, according to ONS data. The quantity bought in July was 2.6% up on a year earlier, and 0.1% higher than in June. Sales volumes during the three months to May 2014 were 3.2% up on a year ago and were 0.3% up on the previous three months. This is the seventeenth consecutive monthly increase and the longest period of sustained growth since November 2007. On-line sales fell by 1.9% during the month, but were still 11.2% up on a year ago.  

• The CBI anticipates that UK economic growth will moderate in the second half after the sharp rises seen in the first six months of this year. Nevertheless its growth forecasts are unchanged for this year and next at 3% and 2.7% respectively. 

Construction

• The latest monthly CIPS Construction survey reported that the construction industry expanded at its fastest pace for seven months in August. The index stood at 64 in August, up from 62.4 in July (where any level above 50 represents growth). CIPS reported broad based growth with the residential, commercial and civil engineering sectors growing strongly. Whilst residential construction was the fastest growing of the three, the pace of expansion had moderated from that seen in July. The strength of the rise appears to reflect the firm growth Glengian recorded in project starts during the first half of 2014. Glenigan’s latest Construction Index recorded a stabilisation in project starts during the three months to August, suggesting that the CIPS survey may an easing in industry growth over the coming months. 

• UK house prices increased by 10.2% in the year to June 2014, down from 10.4% in the year to May 2014, according to the ONS index. House prices are increasing strongly across most parts of the UK, with prices in London again showing the highest growth. House price annual inflation was 10.7% in England, 3.5% in Wales, 6.0% in Scotland and 4.9% in Northern Ireland. Annual house price increases in England were driven by an annual increase in London of 19.3% and to a lesser extent increases in the South East (9.7%) and the East (7.9%).