…By Gift BADEWO for TDPel Media.
FTSE 100 Opens Flat Following Minor Dip
The FTSE 100 is projected to start the day with minimal change after experiencing a slight decline of 0.1% in the previous session.
The index is expected to stabilize at its current level, reflecting a relatively steady market sentiment.
Market Stability and Investor Sentiment
Market stability remains the focus as investors assess the potential impact of recent developments on the FTSE 100’s performance.
Service Sector Growth Slows, Manufacturing Declines
In June, the UK private sector displayed signs of slowing growth, reaching its lowest pace since March.
The closely monitored S&P/CIPS Purchasing Managers’ Index (PMI) revealed a reading of 52.8, indicating continued expansion.
However, the services sector PMI decreased to 53.7, while manufacturing continued its decline as reported earlier in the week.
Economic Outlook and Cost Pressures
Rising interest rates and concerns about the UK’s economic outlook have had an impact on customer demand, contributing to the service sector’s renewed fragility.
Business activity grew at a slower pace, and the rate of new order growth further decreased from April’s peak.
Despite these challenges, input cost growth in the service sector fell to its lowest level since May 2021.
Manufacturing input costs also declined, registering the sharpest rate in seven years.
However, cost pressures remained high due to salary increases offsetting reductions in fuel and energy prices.
Mortgage Rates Surpass 6.5%
In a sign of changing market conditions, two-year fixed-rate mortgages have now surpassed the 6.5% threshold, following the recent crossing of the 6% mark by five-year fixes.
According to data from Moneyfacts, the average interest rate for a two-year fix is now 6.51%, while the average for a five-year fix stands at 6.02%.
The availability of mortgage products at higher prices increased, with 200 more options offered, bringing the total to 4,607.
Impact on Borrowers and Housing Market
The rise in mortgage rates presents new challenges for borrowers, potentially affecting affordability and overall activity in the housing market.
It remains to be seen how these higher rates will influence buyer behavior and market dynamics in the coming months.Share on Facebook «||» Share on Twitter «||» Share on Reddit «||» Share on LinkedIn