UK house prices hit record high but slowdown looms; eurozone bond yields rise – as it happened

• 6.44pm GMT 18:44 Closing summary
• 5.30pm GMT 17:30 European stock markets close higher
• 4.43pm GMT 16:43 Lagarde: Eurozone inflation may subside before becoming entrenched
• 4.14pm GMT 16:14 Asda puts value ranges in all stores after Jack Monroe pressure
• 3.49pm GMT 15:49 Eurozone bond yields lifted by interest rate rise expectations
• 1.27pm GMT 13:27 UK beer prices pushed up by ‘vicious cycle’ of costs, says Cobra founder
• 12.23pm GMT 12:23 Eurozone bond yields jump amid ECB tightening fears

07:35

UK house prices have hit record highs last month, but the cost of living squeeze means growth is likely to “slow considerably” this year, mortgage lender Halifax says.

Halifax has just reported that house prices rose by 0.3% last month, their slowest monthly rise since last June.

On an annual basis, the rate of growth remained steady at 9.7% last month.

But with household budgets squeezed by rising inflation, and higher interest rates pushing up mortgage costs, the market is expected to cool.

In January, the average UK house price on Halifax’s index rose to a new record high of £276,759. That’s around £24,500 up on this time last year, and £37,500 higher than two years ago, before the pandemic.

Russell Galley, managing director at Halifax, says house price growth slowed somewhat at the start of the year.

Affordability is already historically stretched, making it even harder to get onto the property ladder, Galley points out:

“Following the peak activity of 2021, transaction volumes are returning to more normal levels. Affordability remains at historically low levels as house price rises continue to outstrip earnings growth. Despite record levels of first-time buyers stepping onto the ladder last year, younger generations still face significant barriers to home ownership as deposit requirements remain challenging.

“This situation is expected to become more acute in the short-term as household budgets face even greater pressure from an increase in the cost of living, and rises in interest rates begin to feed through to mortgage rates. While the limited supply of new housing stock to the market will continue to provide some support to house prices, it remains likely that the rate of house price growth will slow considerably over the next year.”

Time to wrap up. Here’s the main stories

US house price growth is set to slow substantially, experts say, as the cost of living squeeze hits household budgets.

Mortgage lender Halifax reported that average prices hit a new record of £276,759 in January, but monthly growth slowed to 0.3%. Higher inflation, and rising borrowing costs, are likely to cool the market this year.

European Central Bank president Christine Lagarde has tried to calm concerns that inflation could force the ECB to tighten monetary policy sharply. She told MEPs that the chances have increased that inflation will stabilize at its 2% target, despite hitting its higher level since the euro came in.

Lagarde’s comments came after eurozone bond yields rose, with the gap between Italy and Germany’s borrowing costs hitting its highest since summer 2020.

Supermarket chain Asda has committed to making its cheapest food ranges more widely available, after the anti-poverty campaigner Jack Monroe raised concerns that low-income shoppers were facing price increases because they could no longer get hold of them.

Unions have urged the government to do more to help low-paid workers weather the cost of living crisis, after research found the number claiming universal credit has more than doubled since the start of the pandemic to at least 2.3 million.

The founder of Cobra Beer has warned that drinkers are going to have to pay more for their pints because the industry faces a “vicious cycle” of surging costs.

Two FTSE 350 firms have appointed new CEOs today, and they’re both women.

Pets At Home has appointed Sky UK executive Lyssa McGowan as its first female chief executive, while housebuilder Taylor Wimpey has promoted group operations director Jennie Daly to be its CEO, despite pressure from activist investor Elliott for an external hire.

The mutual insurer LV= has launched a boardroom clear-out following the high-profile failure of its management to sell the company to a US private equity firm last year.

European stock markets have closed higher, with travel stocks boosted by signs that Covid-19 case rates are falling in some countries.

Investor morale in the eurozone has risen....but German industrial production dipped in December as construction output dropped.

And fans of plant milk can now buy potato milk at Waitrose this week:

Goodnight. GW

Some highlights from the Treasury Committee’s hearing on inflation, and the Bank of England today, from my colleague Richard Partington...:

..and Arthi Nachiappan of The Times:

Global supply chain problems have forced investment group abrdn to delay an investor vote on its £1.5 billion takeover of Interactive Investor.... because it couldn’t get hold of enough paper.

Abrdn faced problems securing enough paper to post a circular to its more than a million shareholders before their vote on its planned purchase of ii, the do-it-yourself investment platform.

The paperwork should be dispatched this week, which is about two weeks later than planned.

Simon Goodley

The former owner of Norton Motorcycles faces up to two years in prison after pleading guilty to illegally investing millions of pounds of people’s retirement savings into his own businesses.

Stuart Garner, who acquired the classic marque in 2008 and was feted by a series of UK government ministers including the MP Stephen Barclay, the prime minister’s new chief of staff since Saturday, admitted three offences at Derby magistrates court on Monday.

Garner will be sentenced at the end of the month, when he faces a maximum of two years in prison or an unlimited fine.

The admission comes after pension holders had been complaining for years that the businessman had repeatedly ignored their requests to return their retirement savings. It also follows a 2020 Guardian and ITV News investigation that showed how more than 200 “ordinary working people” had had their entire pension pots invested into Norton shares.

Here’s the full story:

Travel stocks are rallying in the US today, as in Europe, on signs that Covid-19 infections could be slowing in some countries.

Norwegian Cruise Line Holdings, Royal Caribbean Cruises and Carnival Corp are all up around 8% in New York, where American Airlines is up 4% and aircraft manufacturer Boeing is 2.8% higher.

The rally comes as Covid-19 case rates slow in the US and parts of Europe, after a grim winter of record infections.