RICS housing data today, and frankly a disappointment. Anything North of around 40 / 50 indicates solid housing market health, of the type that will re-inspire consumer confidence in the UK (where we all have short memories and TV stations are still full of re-runs of 'Location Location Location' and 'Grand Designs'. 30 (consensus view) would have represented a level that, while a little short of the excesses of the early noughties (where frankly the housing bubble, in the end, became couter productive) still equates to 65% of surveyors reporting a rice in prices (vs 35% a fall). What we got in the end was a slightly flaccid 17%
Given the structural make-up of this country, that is likely to ring alarm bells at the BoE in my opinion. Consumer confidence, and, by association, consumer demand, is fairly heavily influenced in this country by our trust in our bricks and mortar, and the nascent green shoots that were starting to be seen in Q3 / Q4 last year (at least anecdotally in my street where there was a sudden proliferation of estate agents boards with SOLD notices) may well turn out to have suffered from blooming too early in one of the hardest wintes in recent times. Would it were not so (especially as one 'talking his book') but the balance of probabilities seems to be shifting that way.
A quick look at sterling on a trade weighted basis seems to spell out that in periods of sharp housing decline, sterling's fate takes a similar path (on a lagged basis). Certainly the currency is quicker to sell off than to recover. Next month's print could be crucial, and it's tough to see sterling doing anything but remaining a sell on rallies for now.
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