Some good news: The husband and wife team who bought Thomas Cook’s network of high street travel agencies out of liquidation have offered jobs to nearly 2,000 of the company’s former workforce.

John and Irene Hays are reopening 186 Thomas Cook sites, having beaten two US private equity companies in the race to buy the asset earlier this month.

Back to house prices.... and Lucy Pendleton of estate agents James Pendleton says that younger, first-time buyers are keeping the market moving:

“Growth may be almost static nationwide but it would be even worse were it not for the UK’s army of first-time buyers who are putting a floor under prices with their can-do attitude.

“Despite a nuclear winter’s worth of uncertainty, it’s the younger generation who are still forging ahead as if nothing was wrong. They have the longest time horizon and we know that they have continued to transact in huge numbers lately.

Figures released yesterday showed that first-time buyers hit their highest level since the financial crisis in August, as low interest rates keep mortgage repayment costs down .

My colleague Richard Partington points out that the government’s benefit freeze has cost poorer households nearly £600 a year each, on average:

Households squeezed by the government’s benefits freeze are set to receive the first cash increase in payments in five years, despite the austerity policy costing lower-income families £580 each year since 2015.

According to the Resolution Foundation, working-age benefits – including child benefit, universal credit, non-disability tax credits and jobseeker’s allowance – are poised to rise with inflation by 1.7% next April.

It would mark the first cash rise since George Osborne launched the benefits freeze in 2015. However, the government has yet to confirm its spending, tax and benefits plans for the year ahead, when the freeze was due to end.

The assessment comes after the Office for National Statistics (ONS) said inflation remained unchanged in September, with the consumer price index (CPI) holding steady at 1.7%.

The inflation reading for September is used by the government to uprate the value of benefits payments each year, as well as state pensions and business rates.

According to the latest snapshot from the ONS, inflation stayed at 1.7% as sliding fuel prices were offset by increases in the cost of furniture, household appliances and the cost of booking a hotel room...

More here:

The IFS points out that freezing benefits payments at 2015 levels has cut the welfare bill by several billion pounds a year.

That put struggling families in the front line of the austerity crunch:

And even if working benefits do rise by 1.7%, based on today’s inflation reading, that only matches the rising cost of living.

In contrast, total wages rose by 4% in the year to July - which would be used for pensions uprating under the triple-lock system.

ONS Head of Inflation Mike Hardie sums up this morning’s data:

“Inflation remained unchanged into September at its lowest rate since late 2016. Motor fuel and second-hand car prices fell, but were offset by price increases for furniture, household appliances and hotel rooms.

“Annual growth in UK house prices showed a moderate pick-up in August although it remains below the increases seen throughout 2018. Wales saw the strongest growth with prices continuing to fall in London and the South East”.

Despite recent house price falls in London, it’s still desperately difficult to get onto the housing ladder, or shimmy up the steps.

That’s because real wages have only just started growing faster than house prices, meaning property is very unaffordable.

The Resolution Foundation have the details, including that London house prices have risen six times faster than earnings in the capital, since 2011.

Howard Archer of EY Item Club predicts house price growth will remain weak, despite bouncing back from a near eight-year low in August.

He writes:

• Despite the August pick-up in house prices reported by the Land Registry, we strongly suspect that house prices will remain soft in the near term with the economy largely struggling and the outlook highly uncertain. Indeed, both the Nationwide and Halifax reported softer house prices in September. Consequently, we expect house prices to only rise around 1.0% over 2019.
  
  
• Should the UK leave the EU with a “deal” on 31 October - or early next year - we believe reduced uncertainty could see house prices rise by around 2% in 2020. Housing market activity – and possibly to a lesser extent prices – could be given a lift in 2020 if the government cuts Stamp Duty significantly in the Budget later this year However, the economy still looks set for a challenging 2020 even if there is a Brexit deal so that the upside for house prices is likely to be limited

Uncertainty over Britain’s exit from the EU is hurting house prices, says Jamie Durham, economist at PwC:

“Wage growth and relatively low unemployment are continuing to support the housing market. But continued uncertainty in the market, related to Brexit among other factors, is likely to be dampening both supply and demand.

This is particularly the case in the capital and will likely continue to affect price growth over the coming months.”

TUC General Secretary Frances O’Grady is concerned by this week’s economic data:

“Low inflation alongside falling employment is a worrying sign the economy is weakening.

“The government needs an urgent plan to protect growth by speeding up higher public sector investment.

“And MPs must stop the prime minister from forcing through the hardest possible Brexit, which would harm jobs, rights and livelihoods.”

A handy reminder of which inflation rates matter:

UK inflation has now stuck at its lowest level since December 2016 for two months in a row.

It rose sharply in the months following the EU referendum, as the slump in the pound hit import costs. That impact has now faded, slowing the rise in the cost of living

The ONS has also found that raw material prices are down year-on-year, by 2.8%.

This is pulling down ‘factory gate inflation’ too. It hit a three-year low last month, meaning manufacturers aren’t raising their prices as fast.

At 1.7%, Britain’s headline inflation rate is below the Bank of England’s target of 2% -- meaning less pressure to consider raising interest rates.

But in the current political climate, the BoE is leaning towards cutting borrowing costs - especially if there is another Brexit delay.

Sam Cooper, vice president of Market Risk Solutions at Silicon Valley Bank, explains:

“While the below target reading will provide a welcome distraction for participants searching for some Brexit respite, direction will continue to be driven by political developments.

After unemployment data disappointed yesterday, today’s inflation miss could bolster the case for a dovish mantra from the BoE as they navigate uncertain waters. Participants with sterling exposure will likely spend the days chained to their desk as headlines continue to fuel volatility.”

September’s subdued inflation is good news for workers -- it means real wages are still growing.

Yesterday we learned that average earnings, including bonuses, rose by 3.8% per year in the 12 months to August. That’s down from 4.0% the previous month, though, suggesting the labour market is cooling. Unemployment rose, lifting the jobless rate from 3.8% to 3.9%.

Snap reaction

The retail prices index (a broader measure of inflation) was also weaker than expected - dropping from 2.6% in August to 2.4% in September.

The US-driven trade conflict is giving the global economy depression.

So warns Kit Juckes of Société Générale, who says America’s move away from free trade is the more important geopolitical issue driving markets (followed by Brexit).

He cites yesterday’s gloomy economic forecasts from the IMF, which now expects the weakest growth in a decade, adding:

It’s worth pointing out, as an aside, that the IMF isn’t in the business of scaremongering: As late as July 2008 they weren’t forecasting a 2009 recession in any of the world’s biggest economies. Indeed, today’s forecast of 3% global growth this year, and 3.4% next year, compares to a forecast in July 2008 of 4.1% that year and 3.9% in 2009.

Speaking of Brexit.... Whitehall’s spending watchdog has warned of chaos at the ports if the UK leaves the EU without a deal.

The National Audit Office says, in a timely warning, that there could be freight delays, more crime and fewer checks on migrants entering the country.

Losing control, rather than taking it back.....

Online fashion company ASOS is bucking the trend this morning, with its shares surging 16% in early trading after reporting financial results.

That’s quite a jump, especially as ASOS had a shocking year. Pre-tax profits slumped 68% in the 12 months to 31 August, following serious problems at warehouses in Germany and the US that messed up trading.

The company admits it overreached itself, by trying to pull off major expansion in the US and Europe at the same time.

With a dollop of mea culpa, it tells shareholders:

Accordingly we lost focus on several of our core competencies, notably product, presentation and customer engagement.

But sales are still up 13%, despite these hitches, and CEO Nick Beighton claims to be in a “more positive position” for this financial year.

European stock markets have made a lacklustre start to trading too, with the Stoxx 600 index down 0.25%.

There’s another problem with the US-China trade ‘deal’ announced on Friday.

Beijing has, apparently, pledged to buy $50bn of US farm products - a major increase on the $20bn traded in 2017. So to achieve it, China would have to drop tariffs on US agricultural goods.

Sources have told Bloomberg that Beijing wants the US to roll back some of its own tariffs in return, and won’t act otherwise....

China’s stock market has lost some ground overnight.

The Shanghai Composite Index is down 0.4% in late trading, amid worries that the “phase one” trade deal could be unravelling.

Other Asia-Pacific markets are up, though, taking their cue from Wall Street (where the S&P 500 gained 1% on Tuesday).