New Record in UK Budget Deficit, Home Price Sentiment Rises

Arthi Gupta
21 Sep, 2012
New York City

The UK indexes dropped after the home price sentiment index rose in September and budget deficit surged to a new record in August. The Bank of England Governor Mervyn King forecasted slow recovery in the UK.

[R]4:00 PM London – The UK indexes dropped after the home price sentiment index rose in September and budget deficit surged to a new record in August. The Bank of England Governor Mervyn King forecasted slow recovery in the UK.[/R]

The UK indexes dipped. The home price sentiment index rose in September and budget deficit rose to a new record in August.

The Bank of England Governor Mervyn King said on Thursday in a television interview that the UK is likely to experience a slow recovery, depending largely on the economic developments in the euro zone.

In London, the benchmark index FTSE 100 declined 3.40 or 0.1% to 5,851.33 and the pound edged lower to $1.6294.

For the week, the FTSE 100 index declined 1.1%.

UK Home Price Sentiment Rises

UK households perceive that the value of their home declined again in September, but at the slowest rate since July 2010, data from a survey by Markit Economics and Knight Frank showed today.

Average home prices fell again in September, for the 27th consecutive month. But the pace of decline slowed.

The home price sentiment index rose to 46.8 in September, from 44.5 recorded in August and the highest reading since July 2010.

UK Budget Deficit Flat

The UK public sector net borrowing was £14.4 billion in August 2012; equal to the net borrowing in August 2011, data from the Office for National Statistics showed today.

Public sector current budget deficit was £13.2 billion in August 2012, £0.4 billion higher than in August 2011.

Public sector net debt was £1,039.5 billion at the end of August, equivalent to 66.1% of gross domestic product.

Gainers & Losers

DCC plc rose 2.1% to €22.21 and the business support services group signed a conditional agreement with BP Plc to buy Benegas for €24.5 million.

HMV Group plc slumped 8.2% to 2.80 pence after the entertainment products retailer reported comparable sales declined 11.6% in the 20 weeks ended September 15.

Lonmin plc fell 1.7% to 599.88 pence after the miner issued two documents to the press in South Africa relating to the history of the labor dispute and the terms of the settlement.

Mitchells & Butlers Plc fell 1.4% to 282.80 pence after the pubs and restaurants operator announced management changes.

Vodafone Group PLC, the mobile communications operator rose 1.3% to 177.30 pence after a broker upgrade.