The UK economy is currently in a ‘sweet spot’, according to Stefano Silvestrin, senior economic analyst at Nationwide Building Society.
Speaking at the Financial Services Expo show, being held in Old Billingsgate in the City of London, Silvestrin – in a seminar entitled, ‘The economy, housing and mortgage market – what happens next?’ – began by pointing out just how well the UK economy was performing.
He said: “The economy is growing fast and is generating jobs, at the same time inflation is low with GDP growing for the past six quarters at an average speed of 0.8% quarter on quarter. When compared to most developed countries the UK has outperformed most of them, including the US and Germany.”
The second quarter of 2014 was highlighted as a significant quarter because it marked the end of a grey period and, according to the ONS, the economy had now reached its pre-crisis peak.
Silvestrin went on to say that whilst this was good news it also signified how sluggish the recovery had been to date.
In terms of house prices he pointed to a very segmented market with a clear North/South divide but also stressed that the recovery was not just a London story. He suggested house price momentum may be fading but that no sharp corrections were expected.
Focusing on mortgage activity Silvestrin said: “There is a continued upward trend with Help to Buy playing an increasingly important role in stimulating demand for housing, especially working to stimulate activity within areas where activity had been quite subdued. The recent slowdown in mortgage activity appears to be temporary and there is significant scope for remortgage business to pick up in the coming months.”