Time to wrap up...

With City traders’ minds turning to Wembley Way, the London stock market has closed a little higher tonight.

The FTSE 100 closed 14.5 points higher at 7087.5, a gain of 0.2% today.

Online food ordering and delivery company Just Eat Takeaway (+3.9%) were the top riser, followed by specialist chemicals firm Johnson Matthey (+2.5%), steel maker Evraz (+2.1%) and grocery technology firm Ocado (+2.1%).

UK retailers such as Kingfisher and B&M European also rallied, with today’s consumer credit and household savings figures suggesting a pick-up in spending last month. Housebuilders also gained, with Persimmon up 1.5% following the jump in UK house prices.

But gold producer Polymetal led the fallers, down 3.2%, as the stronger dollar pushed the gold price lower.

Travel-focused companies also weakened, with jet engine maker/servicer Rolls-Royce down 1.9% and airline group IAG down 1.4%.

The smaller FTSE 250 index finished flat, with easyJet dipping 0.8% and holiday firm TUI down 5%.

European stock markets had a solid day, with the Stoxx 600 gaining around 0.4%.

Germany’s DAX led the way, up around 0.9% at the close in Frankfurt (where investors will also be switching from stock prices to the football).

Michael Hewson of CMC Markets has a timely summary of the day:

European markets have had an altogether more positive tone after yesterday’s declines; however, the shadow of Delta continues to overshadow wider sentiment.

Travel and leisure are once again feeling the heat after Spain removed UK visitors off their list for restriction free travel with TUI seeing the largest losses, with Ryanair, easyJet and IAG also lower. Rolls Royce is also underperforming as its target of achieving wide body engine flying hours of 55% of the levels of 2019, starts to look increasingly difficult to hit.

There appears to be a growing realisation that for all the optimism over the UK’s vaccination progress, the travel sector will never recover properly until the rest of the world gets its act together when it comes to vaccines. Given how fast the Delta variant is spreading, there is increasing concern that the summer of 2021 could well go the same way as the summer of 2020, for the likes of Europe’s holiday sunspots, creating the potential for further problems for EU politics heading into year end.

Elsewhere in the world Australian authorities are battling to contain the spread of the Delta variant, while in the rest of Asia, Indonesia, Vietnam and Japan are battling to cope with a rise in cases. For Japan and Tokyo especially, it is particularly problematic so close to the start of the Olympics.

UK house prices saw a 13.4% rise from a year earlier according to the latest numbers from Nationwide, while we also saw a bigger than expected rise in mortgage lending in May, which has helped boost housing stocks with Persimmon leading the gainers.

Just Eat Takeaway appears to be getting a lift due to the resilience in the tech sector, as well as its position as perhaps being considered recession proof, given its dominant position in UK, US and European markets.

US consumer confidence has hits its highest level since the COVID-19 pandemic began, boosting hopes for a strong economic recovery this quarter.

The Conference Board’s index of consumer morale jumped to 127.3 this month, up from 120.0 in May, to the highest level since February 2020, from 120.0 in May.

“Consumers assessment of current conditions improved again, suggesting economic growth has strengthened further in the second quarter,” said Lynn Franco, senior director of economic indicators at The Conference Board, adding:

“Consumers’ short-term optimism rebounded, buoyed by expectations that business conditions and their own financial prospects will continue improving in the months ahead.”

Consumers also seem to have shaken off their concerns about inflation, Franco adds:

While short-term inflation expectations increased, this had little impact on consumers’ confidence or purchasing intentions. In fact, the proportion of consumers planning to purchase homes, automobiles, and major appliances all rose—a sign that consumer spending will continue to support economic growth in the short-term.

Vacation intentions also rose, reflecting a continued increase in spending on services.”

With excellent timing, the Bank for International Settlements has flagged that reecnt house price increases have been ‘unusually large’.

Presenting its annual report today, BIS general manager Agustín Carstens points out that financial conditions have remained “extraordinarily easy” since the pandemic began, thanks to fiscal stimulus from governments and very loose monetary policy from central bankers.

Carstens cites the jump in asset prices, and the collapse of hedge fund Archegos, costing banks an estimated $10bn, saying:

Credit spreads declined close to historical lows. Even as profits tanked, corporate funding flowed at record levels, much more so than during the Great Financial Crisis (GFC). There were signs of frothiness and aggressive risk-taking in financial markets, as equity prices surged and housing markets boomed in many economies.

The large losses at several banks that had lent to Archegos put the spotlight on vulnerabilities in non-bank financial intermediation. This mainly reflected hidden leverage and liquidity mismatches.

In its report, BIS (dubbed the central banks’ central bank), points out that house prices soared in many countries over the past year.

Although a rise in house prices during a recession is not unprecedented, partly because accommodative monetary policy meant to stimulate the economy also supports asset prices, recent increases have been unusually large.

BIS says that in advanced economies, house prices rose by 8% on average in 2020, with growth accelerating further in the first few months of 2021. In emerging market economies, prices rose by around 5% on average in 2020.

Rising house prices can contribute to a build-up of household vulnerabilities. As such, understanding why house prices rise is important when evaluating possible risks ahead.

Two factors seem to be behind the rise in house prices, BIS points out

The first is the pandemic itself, with pent-up demand and rising demand for homes more suited to lockdowns and working from home. Because housing supply is relatively inelastic in the short run, demand-induced increases in housing turnover typically go hand in hand with rising house prices.

The second factor is interest rates, which declined early in the pandemic. They make repaying a loan cheaper, but also raise the present value of future housing services, which increases the value of home ownership relative to renting.

BIS warns that faster house price growth is associated with an increased probability of below-trend GDP growth in the medium term.

And it also points to evidence that house prices have risen by more than fundamental drivers, such as borrowing costs and rents, would imply. That may make a correction more likely.

Based on their historical relationship to rents and interest rates, house prices would have been expected to rise in many countries since the start of 2020, but in most cases by less than the actual increase observed.

Growth in rents – a key component in the cost of housing services – slowed in most countries over the past year. But mortgage interest rates and long-term bond yields – the relevant interest rates for discounting housing services – declined, at least until early 2021. This apparent divergence between house prices and their fundamental determinants could make them more vulnerable to larger corrections in the future, especially if financial conditions become less accommodative

The annual report also warns that policymakers still face daunting challenges as we exit the pandemic.

Monetary policy will need to respond flexibly in the face of an uncertain near-term landscape. Public and private debt are very high, and the pandemic’s adverse legacies are large, they point out.

But, as it points out, economic disaster was averted last year, and the global economy bounced back more quickly than expected.

Uneven global recovery creates ‘daunting challenges’ for policymakers, BIS says

US house prices have risen at their fastest rate in at least 30 years, as the surging housing market accelerates - leaving more families priced out.

Prices across the country leaped by 14.6% year-on-year in April, up from 13.3% in March, according to the closely watched S&P CoreLogic Case-Shiller National Home Price Index.

That’s the 11th monthly rise in a row, and the biggest annual increase in the National Composite Index since the survey began over three decades ago.

The index also shows that prices rose by 14.9% across 20 large US cities - the biggest rise in the 20-City Composite in 15 years.

Phoenix saw the sharpest rise, up 22.3% year-on-year, followed by San Diego (+21.6%) and Seattle (+20.2%). Prices were strongest in the West (+17.2%) and Southwest (+16.9%), but every region logged double-digit gains.

Craig J. Lazzara, managing director and global head of index investment strategy at S&P DJI, says the pandemic appears to still be driving the market:

“April’s performance was truly extraordinary. The 14.6% gain in the National Composite is literally the highest reading in more than 30 years of S&P CoreLogic Case-Shiller data. Housing prices in all 20 cities rose; price gains in all 20 cities accelerated; price gains in all 20 cities were in the top quartile of historical performance. In 15 cities, price gains were in top decile. Five cities – Charlotte, Cleveland, Dallas, Denver, and Seattle – joined the National Composite in recording their all-time highest 12- month gains.

“We have previously suggested that the strength in the U.S. housing market is being driven in part by reaction to the COVID pandemic, as potential buyers move from urban apartments to suburban homes. April’s data continue to be consistent with this hypothesis. This demand surge may simply represent an acceleration of purchases that would have occurred anyway over the next several years. Alternatively, there may have been a secular change in locational preferences, leading to a permanent shift in the demand curve for housing. More time and data will be required to analyze this question.

Prices have also been lifted by a lack of supply, partly due to high construction costs and supply chain delays.

And as CNBC points out, there is a growing divide between the haves and have-nots in housing.

Sales activity is gaining dramatically on the higher end of the market but falling on the low end as more buyers are priced out. Some blame the Federal Reserve for keeping mortgage rates artificially low, through its bond-buying program. Record low rates last year helped juice the homebuying boom, but those rates, now slightly higher, cannot offset the huge price gains.

“So much for the Fed’s all-inclusive monetary policy where lower income people now can’t afford housing,” wrote Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Shares in UK travel companies are lower again today, as rising Covid-19 cases threaten hopes for the summer.

British Airways parent company IAG are down 1.9% at 173p, the lowest since late February. Budget airlines easyJet (-1.5%) and Wizz Air (-2%) have both dropped.

WH Smiths, which runs retail outlets at airports and railway stations, are down 2.8%, on concerns that holiday traffic will be lower than hoped.

Travel stocks also fell yesterday, as Malta and Portugal announced restrictions for non-vaccinated UK travellers and Spain said British tourists must provide a negative PCR test or proof of vaccination to visit.

My colleague Daniel Boffey reported yesterday that hopes have been raised of summer holidays in Europe for fully vaccinated Britons, as a deal with Brussels on Covid passports neared completion and Germany failed to convince popular destinations to pull an “emergency brake” on UK visitors.

The problem for many families, though, will be that younger members won’t have had the opportunity for both jabs, especially not children (with Malta saying children aged 12-16 must be fully vaccinated).

Richard Hunter, head of markets at interactive investor, says hopes of a summer holiday revival are fading, due to concerns over the Delta variant.

Despite there being a number of positive factors contributing to a decent recovery in the UK, the travel and airline sectors have come under renewed pressure. The Delta variant remains a concern generally, and the UK government’s reticence to open up the travelling floodgates has been mirrored by a reluctance from some countries to welcome UK visitors.

As such, and with the Longest Day heralding the onset of summer, it is increasingly difficult to foresee anything like the increase in holiday makers which the industry had been pining for over the season.

Package holiday operator TUI’s shares are down 3.9%. It yesterday announced it will issue up to €190m of convertible bonds, upsizing a €400m bond offering from April. It will use the funds to reduce its borrowing from Germany’s state-owned government development bank (KfW).

Speaking of private equity....Clayton, Dubilier & Rice has moved a step closer to its takeover of UDG Healthcare after raising its offer to £2.8bn and winning backing from big shareholders.

CD&R has increased its offer to £10.80 a share as signalled last week, after its earlier bid of £10.23 a share in May met opposition from some of UDG’s largest investors. The UDG board has recommended that shareholders accept the offer, and said it had not received any rival buyout proposals.

The FTSE 250 listed firm’s share price rose 0.5% to £10.71 on Tuesday, valuing the company at £2.7bn. Dublin-based UDG employs 9,000 people and provides advisory, communications, commercial, clinical and packaging services to the healthcare industry. It counts the top 30 pharma companies among its clients.

CD&R said that UDG’s biggest shareholder with an 8.6% stake, Allianz Global Investors, which had rejected the initial bid as too low, and another investor, Kabouter Management, had agreed to accept the higher offer. Allianz and Kabouter together own for 11.4% of the shares.

However, M&G, another top 10 shareholder, indicated last week that £10.80 a share would still fall short of its expectations. UDG said an extraordinary general meeting to vote on the deal, which had been postponed to allow for further negotiations, will take place on 22 July....

More here:

Bridgepoint, the private equity group behind restaurant group Itsu, online cycling specialist Wiggle and the UK arm of Burger King, is planning to raise £300m with a stock market flotation in London.

The listing, expected to value Bridgepoint at up to £2bn in total, comes amid a surge in private equity deals partly prompted by a fall in asset values during the Covid-19 pandemic. Low interest rates have also led investors to pump money into private equity in search of better returns.

In the UK, supermarket Asda has recently been snapped up in a £6.8bn deal backed by private equity group TDR Capital while its rival Morrisons is expected to be at the centre of a bidding battle between private equity groups after the supermarket’s management rejected an initial £5.5bn offer from Clayton, Dubilier & Rice.

Bridgepoint recently bought a stake in Itsu, the Asian food chain created by Julian Metcalfe, having previously backed him during the expansion of sandwich chain Pret a Manger.

The firm, which focuses on mid-sized deals of up to €1bn, was formed in 2000 after a management buyout of NatWest’s private equity arm.

Here’s the full story:

In the eurozone, confidence among businesses and households has risen sharply this month to a 21-year high, as economies emerged from lockdown.

The European Commission’s economic sentiment indicator, which tracks business and consumer confidence, rose to 117.9 in June from 114.5 in May -- the highest reading since 2000, and above expectations.

The increase was driven mainly by a strong increase in confidence in the services sector, as vaccine rollouts allowed shops, bars, restaurants and leisure venues to reopen.

Industry confidence increased for the seventh month in a row to a new all-time high.

Consumer confidence posted its 5th consecutive monthly rise, with people more upbeat about their financial situation, the economic situation, and their intentions to make large purchases.

Sentiment in Germany hit an all-time high and improved in the six largest EU countries, except Spain, where it slightly declined (perhaps reflecting concerns over the summer holiday season).

The survey also highlighted that companies expect to raise their prices, and that consumers anticipate higher inflation over the next year.

British consumers began borrowing again in May, as a jump in car financing deals and personal loans ended an eight-month run of people paying down their credit bills.

For the first time since August 2020, consumers borrowed more as consumer credit than they paid off in May, new data from the Bank of England shows.

Net borrowing rose by £280m during the month, up from a net repayment of £228m in April (when the public were collectively were paying off their credit bills faster than they added to them).

Many shops only reopened after the lockdown during April, while pubs and restaurants in England began indoor service again in May. That lockdown easing has given people the opportunity to spend, perhaps on credit, again.

With the economy reopening, more people are travelling to their place of work - which could lead to more demand for cars.

Also, with company payrolls increasing in May and fewer people on furlough, consumers may be feeling more confident about borrowing (and possibly running up new expenses as they return to work).

Credit card lending remained weak in May compared to pre-pandemic levels, with a net repayment of £101m.

Instead, there was a £381m increase in ‘other’ forms of consumer credit, such as car dealership finance and personal loans.

Households also put less money into their bank accounts in May, another sign that people may be taking advantage of the opportunity to spend again.

Households’ net flow into deposit accounts fell to £7.0bn in May, down from an average of £16.5bn in the six months to April 2021, and below the record high of £27.6bn in May 2020, when the first lockdown drove involuntary saving.

The report also shows that there were 87,500 mortgages approved in May, up from 86,900 in April. That’s lower than the recent peak of 103,200 in November 2020, but still higher than before the pandemic.

Net mortgage borrowing rebounded to £6.6bn in May from £3.0bn in April, suggesting that the extension of the stamp duty deadline from end-March has created a rush of demand (it hit a record £11.4bn in March, in the race to complete deals before the first deadline)

So, taken with the jump in house prices in June, it suggests that consumers are helping the economy recover from its pandemic slump.

Britain’s car industry has warned that 90,000 jobs are at risk in the UK, many in areas the government is keen to ‘level up’, unless the country builds more battery factories to support the transition to electric vehicles.

In a new report, the Society of Motor Manufacturers and Traders (SMMT) says the UK must pledge to build gigafactories where electric batteries are made, and ensure that 2.3 million public charging points are in place by the end of the decade

The plan calls for a new ‘Build Back Better Fund’ to support UK industry, not just the auto sector, in the move to net zero - from upgraded production lines and supply chains to improved skills, and more competitive energy costs.

It also calls for a “binding target of 60 GWh of battery capacity be built by 2030”.

These ‘gigafactories’ would give British manufacturers the capability to produce up to one million electric vehicles a year and ensure tariff free access to critical markets in the EU.

Nissan is expected to announce plans to build a gigafactory in Sunderland later this week, which would produce 6 gigawatt hours of battery capacity a year. The SMMT, though, says many more such factories are needed.

SMMT CEO Mike Hawes warns that the industry is entering a crucial period.

The next few years represent a critical period for the sector. The pace of technological change is accelerating and the competition more ferocious.

If we are to secure vehicle manufacturing in this country, with all the benefits to society that it brings, decisions need to be made today. The automotive sector is uniquely placed to help this government deliver on its agenda; to level up, deliver net zero and trade globally. The Government has made clear its support for the sector in its negotiations with Europe, so now is the time to go full throttle and take bold action to support one of Britain’s most important industries.”

Speaking at a press conference this morning, Hawes points out that many UK car manufacturing sites are based in areas such as the West Midlands, the North East and North West - areas targeted by the levelling up plan.

The report also highlights the need for more charging points to help motorist move to electric cars - particularly those who don’t have a drive to park their car on when charging it.

Finally, to support market transition, the report calls for the installation of at least 2.3 million charging points nationwide before the end of the decade.

This would ensure all drivers – especially those without driveways – have the confidence to invest in the latest zero emission technologies, investment that will not just support a healthy domestic vehicle market, but which will underpin mass market automotive manufacturing in the UK and help deliver the country’s climate change and air quality goals.

The report argues that the UK could create 40,000 new jobs by 2030, if it moves to a zero emissions future “with ambitious global trading terms” and significantly improves its attractiveness for business investment.

This would provide a significant impact in auto heartlands such as the North-East and West Midlands, directly helping ‘level up’ the UK.

Under that “optimistic” scenario, the UK builds 80 GWh of gigafactory output.

But the SMMT warns that in a pessimistic scenario, the UK only builds out 30 GWh of gigafactory supply, while non-tariff barriers with the EU moderately increase from the middle of the decade. Under this scenario, the sector recovers from Covid-19 and then largely stagnates, with substantial jobs lost over time.

And in the worst-case scenario, the UK’s only builds one additional gigafactory. That leaves total supply under 15 GWh and so fails to make the transition away from internal combustion engines.

As a result, around 90,000 jobs are lost, with the majority of these concentrated outside of London and the South East, further increasing regional inequality.

Here’s the 12-point plan:

Technology & Innovation

1. Commit to creating 60 GWh of battery production within the UK via gigafactories by 2030.
2. Support development of a fuel cell gigafactory with 2GWh capacity to support cars, heavier vehicles and rail units by 2030.
3. Roll out a comprehensive and long-term skills strategy that supports auto needs combined with piloting greater flexibility in the Apprenticeship Levy to support retraining.
4. Commit to the UK becoming a global leader in developing, testing, trialling and deploying Connected and Automated Vehicle (CAV) technology.

Manufacturing Competitiveness

1. Introduce a new ‘Build Back Better Fund’ to support good manufacturing jobs for the future and help lower manufacturing costs such as energy.
2. Allow net zero critical industries, such as manufacturers of low carbon, hydrogen and battery vehicles, to access the same benefits and compensation schemes as energy intensive industries and get more support within the UK Emission Trading Scheme (ETS).
3. Fund trial and demonstration projects to explore the use of hydrogen during manufacturing.
4. Ensure the UK tax system helps position Britain as an attractive destination for global investment.

Consumer, Market & Trade

1. Develop a holistic infrastructure strategy to ensure that at least 2.3 million public charging points are in place by 2030.
2. Commission an independent review to holistically consider the long-term future of fuel duty and CO₂ based taxes like vehicle excise duty in a decarbonised sector.
3. Continue Plug-in Vehicle Incentives beyond their current term and exempt Ultra Low Emission Vehicles from taxation for the next five years
4. Work with the industry to develop an ambitious, forward looking trade strategy, which targets the sector’s most important markets.

CC Capital Partners have announced that they don’t plan to bid for IWG, following reports of talks between the two over a potential £4bn deal.

In a statement to the City, they say:

CC Capital Partners LLC (“CC Capital”) notes the recent press speculation regarding a potential offer for IWG PLC (“IWG”). CC Capital confirms that it does not intend to make an offer for IWG.

This has knocked IWG’s shares back - they’ve now up 2.4% today.

Shares in IWG, the serviced offices operator, have jumped 7% this morning on reports that it is the latest UK company to attract the interest of private equity.

Sky News reported last night that IWG, formerly called Regus, had held talks with CC Capital about a possible bid.

Sky’s Mark Kleinman said:

IWG, the world’s largest serviced office group and rival to WeWork, has been in secret talks about a potential takeover offer that could value the company at more than £4bn.

Sky News has learnt that CC Capital, a New York-based private equity firm, has held discussions with Regus-owner IWG about a prospective bid in the last month.

One property industry source said that any offer would need to be lodged at a “very significant” premium to IWG’s current share price to stand a chance of being recommended by the company’s board.

On Monday, shares in the company closed down 2.3% on the day at 300.2p, giving it a market capitalisation of about £3.1bn.

Factoring in a conventional private equity premium implies that a successful offer would need to be worth at least £4bn.

IWG is hoping to benefit from the move to hybrid working, where employees split the week between their home and an office desk, but not necessarily inside their corporate headquarters.

The company warned earlier this month that its recovery was being slowed by the ongoing lockdowns and new Covid variants.

Shares have risen to 322p this morning, still more than a quarter below their pre-pandemic levels.

Russ Mould, investment director at AJ Bell, says:

Bid chatter pushed up shares in serviced officer provider IWG, best known for its Regus brand.

Rumours suggest interest from private equity, coming at a time when many companies are deciding they want more flexibility with where their staff work, and so serviced office space is one alternative to owning office blocks that may no longer be fully occupied.”

The surge in UK house prices makes it harder and harder for first time buyers to find the deposit they need to get onto the housing ladder.

That’s because prices are rising much faster than wages, as this chart shows, meaning that typical 10% deposit required by lenders is swelling too.

Nationwide points out this means it would take five years for someone on the average wage, and saving 15% of take home pay, to raise the average 10% deposit.

Conversely, if you have a mortgage, record low interest rates mean repayment rates are not at historic high levels.

Nationwide’s chief economist Robert Gardner explains:

“Despite the increase in house prices to new all-time highs, the typical mortgage payment is not high by historic standards compared to take home pay, largely because mortgage rates remain close to all-time lows – in fact, on this measure affordability remains broadly in line with its long run average.

“However, house prices are close to a record high relative to average incomes. This is important because it makes it even harder for prospective first time buyers to raise a deposit. For example, a 10% deposit is over 50% of typical first time buyer’s income. A potential buyer earning the average wage and saving 15% of take home pay would now take five years to raise a 10% deposit.

“The improving availability of mortgages for those with a small deposit (and the continued availability of the government’s Help to Buy equity loan scheme) is helping some people over the deposit hurdle, but it is still very challenging for most.

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

UK house price inflation has hit its highest level since 2004, in the last scramble to take advantage of the full stamp duty holiday.

Mortgage lender Nationwide reports this morning that annual house price growth hit 13.4% this month, the highest level since November 2004.

On a monthly basis, prices rose by 0.7% during June, lifting the average price to £245,432 on Nationwide’s index.

That’s a slowdown on May’s 1.7% surge, but still means annual price inflation is the highest in over 16 years.

That partly reflects the weakness of the market a year ago, during the first wave of Covid-19. But it also reflects the rush to buy as the end of the stamp duty holiday nears (the threshold halves to £250,000 on 1 July in England and Northern Ireland, while in Wales the tax break on purchases up to £250,000 ends).

Robert Gardner, Nationwide’s Chief Economist, explains:

While the strength is partly due to base effects, with June last year unusually weak due to the first lockdown, the market continues to show significant momentum.

Indeed, June saw the third consecutive month-on-month rise (0.7%), after taking account of seasonal effects. Prices in June were almost 5% higher than in March.

But Gardner also warns that the outlook for the housing market is harder to assess, once the stamp duty tax holiday ends

“Underlying demand is likely to remain solid in the near term as the economy unlocks. Consumer confidence has rebounded while borrowing costs remain low. This, combined with a lack of supply on the market, suggests further upward pressure on prices. But as we look toward the end of the year, the outlook is harder to foresee.

“Activity will almost inevitably soften for a period after the stamp duty holiday expires at the end of September, given the strong incentive for people to bring forward their purchases to avoid the additional tax.

Nevertheless, underlying demand is likely to soften around the turn of the year if unemployment rises as most analysts expect, as government support schemes wind down. But even this is far from assured. Even if the labour market does weaken, there is also scope for shifts in housing preferences as a result of the pandemic to continue to support activity for some time yet.

Nationwide’s report also shows that all parts of the UK saw an acceleration in annual house price growth in the last quarter.

Northern Ireland and Wales saw the largest gains, at 14% and 13.4% respectively in Q2. By contrast Scotland saw the weakest rate of annual growth, at 7.1% closely followed by London at 7.3%.

Gardner points out that the Scottish Government ended its stamp duty holiday at the end of March, meaning the market may have cooled.

“Northern Ireland was the strongest performing region, with prices up 14% year-on-year, the highest rate of growth since 2007. Wales also saw a significant acceleration in annual house price growth to 13.4%, the largest rise since 2005.

But conditions were more muted in Scotland, which saw a modest increase in annual growth to 7.1% (from 6.9% last quarter) and was also the weakest performing part of the UK. This may reflect that the stamp duty (LBTT) holiday in Scotland ended on 31 March.

“England saw annual house price growth increase to 9.9%, from 6.4% in the first quarter of the year.

Reaction to follow....

The agenda

• Today: SMMT holds its International Automotive Summit 2021
• 9.30am BST: UK mortgage approvals and consumer credit figures for May
• 10am BST: BEIS Committee hearing into the financial relationships of GFG Alliance and Liberty Steel
• 10am BST: Eurozone consumer and business confidence figures for June
• 2pm BST: US house price figures for April
• 2.40pm BST: ECB president Christine Lagarde speaks at the Brussels Economic Forum 2021