Friday, September 1, 2023

Homeowner blues

The Readout With Ruth David.

The bad news for Britain's property market keeps coming. House prices in August fell at their fastest pace since July 2009, when markets were reeling from the impact of the global financial crisis. The average cost of a home dropped 5.3% year-on-year in August, Nationwide Building Society said. The latest figures follow Bank of England data Wednesday that showed mortgage approvals fell nearly 10% in July.

Economists predict prices will fall further as lenders and the markets absorb the impact of 14 consecutive interest rate hikes from the Bank of England. Borrowing costs are set to remain higher for longer, according to Bloomberg Economics' Niraj Shah. "While more lenders started to lower mortgage rates in August, key borrowing rates remain close to 15-year highs. That will lower purchasing power and likely lead to more buyers making offers below the asking price," Shah said in a note Friday.

Meanwhile, the central bank's chief economist, Huw Pill, continues to wax lyrical about the state of the UK economy on his trip to South Africa. Pill said last year's market crisis caused by former Prime Minister Liz Truss was "not a comfortable experience" for the central bank and compared it to dipping one's toes in a river with lots of crocodiles. He was speaking on a panel in the country. Yesterday, he said he preferred a "Table Mountain" scenario for UK interest rates, where they remained moderately high for a while.

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What just happened

The stories you need to know about this evening

Sports & (Saudi) Money

Saudi Arabia has rapidly established itself as the biggest source of new money flowing into the world of sport, whether that's in golf or football. Now some cricket players are hoping the kingdom's money will help transform England's national sport.

"You can't compete with money, especially the money that Saudi Arabia is throwing around to certain people," England cricket captain Ben Stokes  told Jamie Nimmo in an interview. Stokes is one of the athletes backing a new London-based £40 million venture capital firm called The Players Fund, joining a storied list of celebrities — from Ryan Reynolds to LeBron James — investing in the lucrative world of sports.

England captain Ben Stokes  Photographer: Stu Forster/Getty Images Europe

This week is also a reminder of how little money is going into women's sports. So far, all the athletes announced for The Players Fund are male. Saudi Arabia has no investments of note in women's sports, despite Crown Prince Mohammed bin Salman's plans to increase freedoms for women in the workplace and outside. And at a time when the Spanish women's team should be showered with new sponsorship and advertising deals following their historic win against England in the Women's World Cup final, headlines continue to be dominated by the scandal of a forced kiss.

"This should be a golden period for commercial partners of the women's team, with a hugely successful tournament having positioned the game for an explosion of interest and potential marketing opportunities," Matthew Brooker writes for Bloomberg Opinion. "Yet instead of positive narratives, the oxygen around the sport is being consumed by the (Luis) Rubiales controversy."

Elsewhere in the UK, that summer feeling is coming to an abrupt end and not just because of another rained out week. Wall Street firms, from Citigroup to HSBC Holdings and BlackRock, are now tightening their return to office requirements, reports Aisha S Gani.

The move comes even as new Covid strains gain ground globally (you can read all about it here) and hospitalizations start to tick up. The pain could be exacerbated in the UK where junior doctors and senior doctors have just announced they will strike together this month and the next, a first for the already overwhelmed National Health Service.

Thankfully, the UK's abundance of parks are still free and a relatively covid-safe way to spend the weekend. Maybe a picnic instead of dining out, which is becoming even costlier in the country as restaurants add higher gratuities into tabs to offset labour shortages that are squeezing margins and continued food price inflation, David Ramli reports.

What we've been reading

Style refresh. Tesla has revamped the Model 3 sedan with sleeker looks and longer range.

Tightening grip. After almost a year of treading carefully, Italian Premier Giorgia Meloni is unleashing her brand of hands-on capitalism with greater gusto.

Divided. Top Russian officials are in disagreement over the option of tighter controls as the ruble again comes under pressure to depreciate.

Obesity medicine. Danish drugmaker Novo Nordisk momentarily surpassed French luxury powerhouse LVMH to become Europe's most valuable company.

Flipping the script on China

One key story, every weekday

President of China Xi Jinping on the last day of the 2023 BRICS Summit in Johannesburg on August 24 Photographer: ALET PRETORIUS/AFP

If China once seemed on an inevitable path to overtaking a declining America as the world's leading economic power, that's no longer the case. The calculations in Washington and beyond are increasingly about how to deal with a China that, even if it is not yet in absolute decline, may well be approaching a peak in power.

Read The Big Take.

Please send thoughts, tips and feedback to readout@bloomberg.net. You can follow Ruth on Twitter.

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