UK Dodges Recession, But House Price Fall Accelerates

ONS figures show UK avoided a technical recession, but Nationwide house price figures are a cause of concern for homeowners

Alliance News 31 March, 2023 | 12:26PM
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The UK economy registered marginal growth in the final quarter of 2022, final data showed on Friday, meaning it dodged recession in 2022.

According to a final estimate from the Office for National Statistics, gross domestic product in the fourth quarter grew 0.1% from the third quarter, which was revised up from an initial estimate of no growth.

This follows a contraction of 0.1% seen in the third quarter, which was revised from a 0.2% decline.

This means the UK avoided a technical recession, which is defined as two consecutive quarters of negative growth.

"The level of real GDP in quarter 4 2022 is now estimated to be 0.6% below where it was pre-coronavirus at quarter 4 2019, revised upwards from the previous estimate of 0.8% below," ONS said.

In 2022 as a whole, GDP is estimated to have increased by 4.1%, revised upwards from the previous estimate of 4.0%. This still marks a slowdown from a 7.6% increase in 2021.

Ides of March

Meanwhile, UK house prices saw their steepest fall in over a decade in March, according to figures from mortgage lender Nationwide on Friday.

UK house prices fell 3.1% annually in March, which was the largest annual decline since July 2009. It shows the pace of decline accelerated from the 1.1% fall seen the month before.

The March reading was worse than FXStreet-cited market consensus of a 2.2% fall.

On a monthly basis, house prices fell 0.8%, speeding up from a 0.5% fall in February. It was steeper than the 0.3% fall expected by the market.

"The housing market reached a turning point last year as a result of the financial market turbulence which followed the mini-Budget. Since then, activity has remained subdued – the number of mortgages approved for house purchase remained weak at 43,500 cases in February, almost 40% below the level prevailing a year ago," said Robert Gardner, Nationwide chief economist.

The average UK house price in March was £257,112, down from £257,406.

"It will be hard for the market to regain much momentum in the near term since consumer confidence remains weak and household budgets remain under pressure from high inflation. Housing affordability also remains stretched, where mortgage rates remain well above the lows prevailing at this point last year," Gardner continued.



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