Rolling coverage of the latest economic and financial news, as German industry continues to struggle badly
- Introduction: German industrial output slumped in October
- Output -5.3%: worst since 2009
- Recession fears are rising after ‘disastrous’ data
Just in: UK house prices jumped 1% in November, the fastest monthly rise in seven months.
That’s according to mortgage lender Halifax, and suggests that the clouds of political uncertainty may be lifting a little.
“Average house prices rebounded somewhat in November, with annual growth of 2.1% being driven by the biggest monthly rise since February, following two months of modest falls.
Prices are now up by £3,904 since the start of the year. While a degree of uncertainty remains evident, it’s also clear that buyers and sellers are responding to factors such as improved mortgage affordability and the limited supply of available properties.
The slump in German factory output in October is so bad that it could drag the wider economy back towards recession.
Oliver Rakau of Oxford Economics says the plunge in production is “disastrous”, and could mean that the economy shrinks in the final quarter of this year.
This is a disastrous industrial production number out of Germany. Production tumbled 1.7% m/m in October marking a new cyclical low, which is likely to push Q4 GDP trackers into negative territory. 1/n
The drop resulted primarily from sharp production cuts in the capital goods sector & in construction, while consumer and intermediate goods rose. The 1% gain for intermediates furthers the signals of bottoming out there as inventory adjustments look to have run their course. 2/n
On intermediates, the strong rise in chemical output was a positive. Within capital goods, the car sector, mechanical engineering and heavy transport equ. were weak spots, but electronics was positive. 3/n
And remember that Oct. industrial turnover was reported flat-ish & is less revision prone. So, the risks of a Q4 GDP contraction have risen after the weak retail & industrial reports, it is too early into the quarter to give up given the usual volatility in German data. 5/5