Kate Andrews

House prices dropped more than was expected this month, falling 5.3 per cent compared to August last year. The value of the average home in Britain has, on average, fallen by £14,600. This marks the biggest annual decline on record since the financial (and housing) crash of 2008/9. So, is a housing crash imminent? Could we be seeing one right now? There are a few reasons to be cautious about the data. Nationwide’s metrics are based on mortgage approvals (cash purchases are not included), which have dropped significantly – by about 20 per cent this year, compared to 2019. Higher interest rates have meant that fewer people want to sell right now, and fewer people are in a position to buy.

It’s no great secret that the events of the past few years have delivered a serious economic blow to the UK. But just how many years has the country been set back? This morning the National Institute of Economic and Social Research has published its updated 'Economic Outlook’ which digs into some of these figures, erring on the pessimistic side of the forecast spectrum. According to the NIESR’s new report, the UK economy is still a year off reaching its pre-pandemic levels. In the last quarterly update, the country’s GDP still sat 0.5 per cent below its level in the last quarter of 2019 – a figure that the Bank of England thinks will finally make a full recovery by the end of 2023.

The government’s objective to ‘halve inflation’ by the end of the year seems to be back on track – for now. Last week’s interest rate hike was delivered with an updated inflation forecast from the Bank of England, showing the rate slowing to 4.7 per cent by the end of the year, just below Rishi Sunak’s target. The better-than-expected fall in the headline rate last month has forecasters thinking things are finally moving in the right direction. As Ross Clark reports on Coffee House, Capital Economics is expecting another major fall in the rate next week – down to 6.9 per cent on the year – when July’s figures are released.

Most people will not see their estates subject to inheritance tax. Still, most people oppose the principle of the tax altogether. New polling from Ipsos confirms, once again, how loathed the death tax is: 23 per cent of people perceive the tax as ‘fair’ (tied for the lowest ranking, alongside stamp duty). Meanwhile 43 per cent of people see the tax as ‘unfair’ (the highest ranking, even more hated than income tax paid by the lowest earners). It won’t go down well, then, that almost 50,000 additional households are expected to be dragged in to paying inheritance tax, nearly four times the expected increase according to HMRC forecasts seen by the Daily Telegraph.

Two by-election defeats have made it a miserable morning for the Tories, even if they did manage to cling on in Uxbridge. But they’ve had better-than-expected news on another front. This morning’s update from the Office for National Statistics (ONS) reveals that public sector net borrowing has come in lower than what was forecast at the March Budget: £18.5 billion in June, compared to the Office for Budget Responsibility’s (OBR) prediction of £21.1 billion. Borrowing last month was £0.4 billion less than the year before, while interest payments on government debt saw a huge drop: from £20 billion last June down to £12.5 billion this June.

It’s been more than two days since Keir Starmer told the BBC’s Laura Kuenssberg that Labour would keep the two-child benefit cap, yet the party seems no closer to finding resolution on the issue. The pushback within the party has been intense, with plenty of people (including, reportedly, members of the shadow cabinet) asking how the opposition leader can keep a benefits cap that he once railed against. But Starmer isn’t budging. Speaking on a conference stage with former prime minister Tony Blair this evening, Starmer insisted this wasn’t an issue of changing hearts, but rather a changing set of circumstances. Speaking about spending commitments more generally, Starmer noted that: We keep saying collectively as a party we’ve got to take tough decisions.