Friday, March 28, 2008
Nationwide down 0.6%, fifth in a row
Posted by David Smith at 09:45 AM
Category: Thoughts and responses

The Nationwide is emerging as the gloomiest of the house price series, as it was in the early 1990s. Prices have fallen by 0.6% this month, it says, and are now up by only 1.1% on a year earlier and annual house-price inflation will soon be down to zero. From their peak in October, prices have dropped by 2.8%. The credit crunch is having a big impact, exemplified by Nationwide's own decision to raised the rates on its tracker mortgages for new borrowers. This is the "new and different phase" Mervyn King referred to in the credit crisis. Until credit conditions thaw, the market will remain under pressure. More details here.

Also out today, figures confirming that the economy grew by 0.6% in the final quarter of 2007. The saving ratio edged up modestly from 2.6% to 3.3%. Consumer spending rose by only 0.1%. More details here. There was better news on the current account, which narrowed to a deficit of 8.5 billion in the fourth quarter, from a record 19.1 billion in the third, confirming that the credit crisis badly distorted the third quarter numbers. More here.