Key Statistics: 25 Nov 2014

Construction

• House price inflation picked up to 12.1% in the year to the end of September, according to ONS figures, up from an annual rate of 11.7% in August. House prices continue to increase strongly across the UK; London has again shown the highest growth rate at 18.8%. Annual house price inflation was 12.5% in England, 5.8% in Wales, 7.6% in Scotland and 10.9% in Northern Ireland. The rise in prices recorded by the official statistics is in contrast to recent market surveys point to a recent cooling in market conditions. 
• At 33,000 (seasonally adjusted) the number of new homes started in England during the third quarter was 10% down on the preceding three months and just 1% up on a year ago, according to official DCLG statistics. Private sector housing starts, at 27,300 units, were 8% lower during the quarter than in the previous quarter. Housing associations started 5,260 homes, a 22% drop on the previous quarter. The decline in housing association starts follows a marked decline in project starts recorded by Glenigan this year. The dip in private sector unit starts has coincided with an easing in the pace of private sector project starts during the third quarter, suggesting that housebuilders may be tempering their development rate in response to a slowing in the wider housing market.
• New homes completed during the third quarter totalled 31,130, a 5% rise on the previous quarter and 8% up on 2013 Q3.  At 24,280 dwellings, private sector completions were 3% up on the previous quarter and 10% up on a year ago, while housing association complete 6,550 units, an 11% rise on the previous quarter and 3% more than year ago.

Economy

• Retail Sales volumes during October were 0.8% up on the previous month and 4.3% higher than a year ago, according to National Statistics. The October rise was the nineteenth period of consecutive year on year growth. The rise in volumes was accompanied by a weakening in average store prices which were 1.5% down on a year ago, with weaker petrol prices a major contributor to the decline. The proportion of sales made online fell by 0.1% during the month to account for 11.2% of all sales in October 2014, but is widely expected to strengthen again in the run up to Christmas.
• In contrast to the weakening in store prices, overall inflation picked up during October. The Consumer Prices Index (CPI) grew by 1.3% in the year to October 2014, up from 1.2% in September. The wider, long standing measure, RPI, has continued to record a faster rate of inflation, with a 2.3% increase in the year to October
• Factory gate prices fell 0.3% in October and were 0.5% down on a year ago. Manufacturers’ input costs have also been falling; the overall price of materials and fuels bought by UK manufacturers for processing (total input prices) fell 8.4% in the year to October. This was due to falling prices for crude oil, petroleum and food products.
• Government Borrowing stood at £7.7bn in October, official figures show, down £0.2bn against October 2013. However government borrowing so far during the current financial year stands at £64.1 billion, an increase of £3.7bn from the same period last year. Official forecasts, due for review next month, have projected a 10% decline in the deficit during 2014/15. Weaker than anticipated tax receipts have contributed to the deterioration in the budget deficit, with income tax receipts affected by weak earnings growth.