(Bloomberg) -- Hi, I’m Leo from Bloomberg's UK Breaking News team, catching you up on this morning’s top business stories.
Britain’s housing market has been defying doomsters with unexpected price rises in recent weeks. But Rightmove data today shows that home sellers are slashing their asking prices. What might look like a contradiction is “exactly the kind of dynamics” one would expect right now, says my colleague Sam Unsted. More below.
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Key Business News
Heathrow Airport recorded a 10% jump in passengers last month and said it expects a strong December. Departure numbers are expected to peak the week before Christmas — so pack lots of patience if you're traveling for the holidays. The update comes after a Times report that Saudi Arabia may ultimately gain majority control of Europe’s busiest travel hub, with several shareholders on the verge of selling their interests.
Insolvency consulting firm Begbies Traynor gave an upbeat outlook, albeit with dire implications. The Manchester firm expects activity levels to continue to increase in tandem with indicators of corporate financial stress in the UK — giving its board “confidence that the insolvency team will continue to deliver growth.”
Thames Water, meanwhile, warned that London risks running dry without a reservoir.
Finally, can Arm’s chips be as essential to AI as to phones? Find out in our interview with the UK semiconductor giant here:
Markets Today’s Take
The Rightmove data show exactly the kind of dynamics that one would expect to see in the UK’s housing market right now. Sellers are becoming more realistic about listing their homes at prices that will get a decent offer that a potential buyer can afford, eventually meaning the deal gets done. When people are listing at unrealistic asking prices, they don’t attract bids and the house stays on the market for longer, putting the power into the hands of the buyers. Knocking a little off the asking price to reduce the chance the chain collapses is well worth it for most.
It all points to the slow conditions in the market continuing into 2024 and, to reiterate what we’ve written many times on Markets Today, any real recovery won’t emerge until the Bank of England starts cutting rates.
— Sam Unsted
For more news and analysis throughout the day, follow Bloomberg UK’s Markets Today blog.
The BOE’s rate-setters will be closely watching the latest job data at 7 a.m. tomorrow. (And so should we for that matter.)
The ONS numbers could show further signs of reduced demand for workers, but what monetary policymakers will likely care about most is the pace of wage gains.
Bloomberg economists expect private sector pay growth slowed to 7.5% in the three months to October, from 7.8% previously. That would be roughly in line with BOE’s forecast — and therefore not yet enough for policymakers to start cutting rates.
--With assistance from Alexandria Arnold.
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