ROOF Blog archive

Economists declared the recession over today as official data showed mothballed factories springing back to life and rising optimism in the City stoked a new merger spree. The FTSE 100 index of blue-chip stocks pushed close to the 5,000 mark for the first time since the aftermath of Lehman Brothers’s collapse 12 months ago, prompting the second multibillion pound deal of the week. Meanwhile, government figures showed that Britain’s hard-pressed manufacturers had cranked up production for a second successive month in August after running down stocks dramatically in the early months of the year.The National Institute for Economic and Social Research thinktank (NIESR) calculated that the recession is likely to have ended in May. As consumers are buoyed by stabilising house prices and return to the shops, many analysts agree the economy should now record positive growth in the third quarter of the year – the official definition of the end of recession.

A closely watched survey from the Royal Institution of Chartered Surveyors found that rents were still falling, albeit more slowly than earlier this year, in part because fewer ‘accidental landlords’ are entering the market by seeking tenants for unsaleable properties. A majority of agents surveyed by RICS reported that rents were falling rather than rising in the three months to July, by a balance of 29 per cent. However, that is far less gloomy than the 55 per cent more agents who said rents were falling in a survey covering the three months to April. The study coincides with official data showing rising availability of mortgage finance and modest rises in house prices over recent months, information that could encourage home-owners to sell rather than seek a tenant, RICS said. ‘The number of properties coming on to the rental market has slowed as the sales market has begun to stabilise,’ said Jeremy Leaf, RICS spokesman. ‘Providing the housing market holds firm, the outlook for the rental market should continue to improve.’