UK house prices increase almost 1% in October; Next lifts profit forecasts again – business live | Business

More retail news: Asos has warned sales will continue to fall in the year ahead – by much as 15% – after delayed results revealed it slumped to a near £300m annual loss.

Analysts have expressed fears that the online fashion site will need to raise new cash – potentially through the sales of its Topshop brand – with net debt including leases now at £648.5m, up from £533m a year before.

José Antonio Ramos Calamonte, Asos’s chief executive, said it had made “good progress” in “a very challenging environment” and would continue to bring in new more fashionable stock and invest in its brand.

The company plans to spend £30m more on marketing and said it was going “back to fashion” with its products “geared around fashion and excitement.”

Despite October’s pick-up, UK house prices may drop again as winter sets in, warns property agent Emma Fildes of Brickweaver.

Guy Gittins, CEO of Foxtons, argues that the UK’s central bank could give the market more confidence by not raising interest rates again on Thursday.

All eyes will be on the Bank of England this week and the latest decision with regard to the base rate.

A decision to hold, or even reduce, interest rates is unlikely to generate a dramatic uplift in market activity, especially with Christmas fast approaching, but it will add confidence to the market ahead of January.”

Alice Haine, personal finance analyst at Bestinvest, says the 0.9% rise in house prices in October offers a glimmer of hope to homeowners that the worst of the downturn may be over, adding:

The unexpected uplift led to an improvement in the annual rate of house price growth, which dropped by -3.3% from a decline of -5.3% in September.

While this may deliver relief to homeowners, the uptick reflects the low stock of properties up for sale as high borrowing costs and uncertain conditions caused many sellers to delay putting their home up for sale.

Breaking: clothing retailer Next has raised its full-year profit outlook again, despite the cost of living squeeze on consumers.

Next has increased its full year guidance for profit before tax this financial year by £10m to £885m – it’s fourth increase in the last six months, following an early upgrade in September.

The upgrade comes as Next also reports a 4.0% rise in full-price sales in the third quarter of this year.

Next says:

Our revised guidance for full year full price sales growth is now +3.1%; this assumes that full price sales for the rest of the year are up +2.0%.

Profit generated from the additional sales achieved in the third quarter has added £10m to our full year forecast for profit before tax.

Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.

The health of the UK housing market will be on the mind of Bank of England policymakers this week, as they meet to set interest rates at noon tomorrow.

And the latest news is that house prices increased in October, but remained lower than a year ago, as a shortage of properties lifted prices after their recent falls.

Lender Nationwide has reported this morning that UK house prices rose by 0.9% month on month in October, compared to forecasts of a 0.4% fall.

The average price of a property sold last month rose to £259,423, up from £257,808, according to Nationwide’s data which is based on transactions involving a mortgage.

That still leaves house prices down 3.3% compared to October 2022, though, which is a smaller annual fall than the 5.3% recorded in September.

Robert Gardner, Nationwide’s chief economist, warns that housing market activity has remained extremely weak.

Gardner says:

This is not surprising as affordability remains stretched. Market interest rates, which underpin mortgage pricing, have moderated somewhat but they are still well above the lows prevailing in 2021.

“The uptick in house prices in October most likely reflects the fact that the supply of properties on the market is constrained. There is little sign of forced selling, which would exert downward pressure on prices, as labour market conditions are solid and mortgage arrears are at historically low levels.

“Activity and house prices are likely to remain subdued in the coming quarters. Despite signs that cost-of-living pressures are easing, with the rate of inflation now running below the rate of average earnings growth, consumer confidence remains weak and surveyors continue to report subdued levels of new buyer enquiries.

Figures on Monday showed that UK mortgage approvals slumped in September as stress build up in the property market, with the fewest home loans approved since January.

Also coming up today

The US central bank, the Federal Reserve, will set interest rates later today (6pm UK time). The Fed is expected to leave interest rates on hold, while it assesses whether its existing monetary tightening is enough to bring down inflation.

Executives from some of the world’s bigest tech firms are joining world leaders and artificial intelligence experts at Bletchley Park, the birthplace of computing, for Rishi Sunak’s AI summit.

The event will focus on frontier AI systems, the cutting-edge models that can perform a wide variety of tasks matching or exceeding the performances of the most advanced AI available today.

Flexible workspace provider WeWork is expected to file for bankruptcy as early as next week, as the SoftBank Group-backed company struggles with a massive debt pile and hefty losses.

We also get a healthcheck on UK factories’ performance last month, with the latest survey of manufacturing purchasing managers.

Overnight, PMIs from China, Japan and South Korea have shown activity shrinking while Vietnam and Malaysia also struggled last month, as the slowdown in China’s economy rippled.

The agenda

• 9.30am GMT: UK manufacturing PMI report for October

• 11am GMT: US weekly mortgage approval levels

• 12.15pm GMT: ADP survey of US private sector payrolls

• 2pm GMT: JOLTS survey of US job vacancies

• 6pm GMT: Federal Reserve sets interest rates

• 6.30pm BST: Federal Reserve press conference