UK inflation hits highest figure in almost a decade as food prices rise – business live | Business

US import prices fell for the first time in 10 months in August because of a decline in oil and petroleum products – further evidence that inflation has probably peaked.

Import prices fell 0.3% last month after increasing 0.4% in July, the US Labor Department said. It was the first decline since last October and took the annual growth rate down to 9% from 10.3% in July. Yesterday, the headline rate of inflation in the US eased to 5.3% in August from 5.4% the month before.

There are several bits of US economic news.

The US housing market is booming: Mortgage applications to buy a home jumped 7% last week from the previous week to the highest level since April, according to the Mortgage Bankers Association. Applications were still 11% lower than the same week a year ago, but it was the smallest annual decline in 14 weeks.

Would-be buyers have been held back by the small supply of homes for sale, but that supply has been rising slowly over the summer. The number of new listings rose for nine consecutive weeks during the summer, but finally fell again last week, according to CNBC, which quoted a Realtor.com report. It said:

Even with the recent new listings slip, the gap with pre-Covid levels has shrunk significantly as more new sellers have entered the market so far in 2021 than last year.

Joel Kan, an MBA economist, said:

Both conventional and government purchase applications increased, and the average loan size for a purchase application rose to $396,800. The very competitive purchase market continues to put upward pressure on sales price.

The UK house price data released today showed the second steepest monthly decline in house prices since 1968, of 3.7%, knocking around £10,000 off the value of the average home.

Tom Bill, head of UK residential research at Knight Frank, says:

Like a bad Hollywood blockbuster, the UK housing market looks like it will have a predictable finale this year after an explosive start. Demand remains robust and the economic backdrop increasingly has a feel-good factor as Covid disappears into the rear-view mirror.

The key question is by how much supply picks up as autumn approaches. We expect seasonality and needs-driven buyers to play an important role in driving supply higher, which should start to curb house price growth. The monthly decline in July was the largest since 1992 and the second steepest since 1968 and we therefore expect annual growth to end the year in single digits.

On the stock markets, the FTSE 100 index has turned positive and is trading nearly 10 points higher at 7,043, a gain of 0.1%. The other main European indices are in the red, though –

• Germany’s Dax down 0.19% at 15,693
• France’s CAC 40 down 0.57% at 6,614
• Italy’s FTSE MiB down 0.49% at 25,898

The latest official UK house price figures are out. The average price of a property fell by around £10,000, or 3.7%, to £255,535 in July, and the annual growth rate fell to 8% from 13.1% in June, as the stamp duty holiday was phased out.

The main findings are:

• The average UK house price is £19,000 higher than this time last year, following the record high of £265,000 in June 2021.
• Average house prices increased over the year in England to £271,000 (7%), in Wales to £188,000 (11.6%), in Scotland to £177,000 (14.6%) and in Northern Ireland to £153,000 (9.0%).
• London continues to be the region with the lowest annual growth (2.2%) for the eighth consecutive month. House price growth was strongest in the North East where prices increased by 10.8% in the year to July 2021.

Cut-price fashion and homeware chain Primark has committed to making its clothing more sustainable over the next decade, promising that its strategy will not lead to price rises, our business reporter Joanna Partridge reports.

The retailer has pledged to make clothes that can be recycled by 2027, while all of its clothes will be made from recycled or more sustainable sourced materials by 2030.

Just a quarter of the clothing sold by Primark is currently made from recycled of sustainably sourced materials.

The chain, which is owned by Associated British Foods, said it intends to start making its men’s, women’s and kids’ entry-price t-shirts with sustainably-sourced cotton over the next year.

The company has also vowed to make its clothing more durable, so they last longer, as part of its promise to “make more sustainable fashion affordable for all”.

Returning to our main story, UK inflation, my colleague Hilary Osborne, who runs our Money team, has done a handy Q&A.

Here is some reaction to the rebound in eurozone industrial production in July. Peter Vanden Houte, ING’s chief economist covering Belgium and Luxembourg, says:

Eurozone industrial production recovered strongly in July after two months of contraction. As the seasonal adjustment flatters the summer months, it is too soon to dismiss the negative growth impact of supply chain problems. Meanwhile, the drop in labour costs is a statistical quirk.

We have to wait until September to know the extent to which supply chains have normalised and production can pick up more structurally, but recent reports are still qualified in that regard. Don’t get us wrong, the July figures are certainly good and courtesy of the recovery in the services sector, GDP growth is likely to hover around 2% quarter-on-quarter in 3Q, but we anticipate slower growth from 4Q onwards.

Holly Mackay, the chief executive of the website Boring Money, says:

We know that many consumers do not invest because they don’t know where to start or who to trust. Our research confirms that consumers are very aware of the potential for capital loss – in fact they tend to over-estimate potential losses meaning they often see investing as overly risky.

Our findings show 45% of savers with more than £10k in cash say they would consider investing in the future. So while there is a general appetite to in invest, we see a confused understanding of risk and what that actually looks like in practice.

The gender investment gap is well documented and we see women in particular are recklessly cautious in their…