The sterling remained steady on Wednesday morning after data from mortgage lender Halifax showed an annual drop in UK house prices for the first time since 2012.
During the morning session, the British pound remained steady against the U.S. dollar at $1.242, showing signs of restabilizing following a 0.2% drop immediately after the release of the house pricing data. The sterling was flat against the euro at 86.07 pence.
British house prices fell as Halifax implemented an increase in mortgage rates. “The bigger impact house prices have is in the equity markets, as they are important for housebuilders, and it is no surprise that we are seeing the likes of Persimmon and Redrow all trading lower this morning,” Stuart Cole, chief macro economist at Equiti Capital observed.
While UK inflation declined in April, the fall was less than expected, thereby raising bets that the Bank of England will implement another interest rate hike when it reconvenes on June 22. Traders expect that there is an 88% chance of a 25 basis point hike.
