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Equilibrium’s finance and investment news roundup

Our roundup this week includes news of the easing of house price growth in the UK, a rise in the cost of Tesco carrier bags, further drops to consumer spending and suggestions that a shortage of staff in permanent roles is pushing up pay.

UK house price growth ‘easing’

House prices in the UK have fallen quarter-on-quarter for the fourth month in a row for the first time since 2012, new data from the Halifax has shown. According to the lender, property prices between May and July were 0.2% lower than the previous three-month period.

Based on the Halifax’s own mortgage data, the figures showed the annual growth of house prices had slowed to 2.1%, which is in line with several recent surveys also pointing to a slow down in the UK housing market.

Halifax revealed the cost of the average home increased by 0.4% between June and July, with the average property valued at £219,266. The data does bring positive news for first-time buyers, indicating that house prices are not accelerating out of reach as seen previously.

Tesco announces carrier bag price hike

Tesco has announced plans to stop the sale of its 5p carrier bags in UK stores in favour of offering 10p bags for life to shoppers. The supermarket giant, which sells approximately 700 million single-use carrier bags a year, said the decision comes after a trial led to a 25% drop in bag sales.

Following the 10-week trial in Aberdeen, Dundee and Norwich, there is now set to be a permanent move away from 5p bags at stores across the UK. The more expensive bags are produced from 94% recycled plastic and will be exchanged without charge when damaged.

Matt Davies, UK and Irish Republic Chief Executive at Tesco, said: “[This] move will help our customers use even fewer bags but ensure that those sold in our stores continue to fund thousands of community projects across the country chosen by customers.”

Consumer spending falls for third consecutive month, says Visa

UK consumer spending has fallen for the third month in a row in July, research from Visa has shown. According to the credit card firm, spending fell by 0.8% compared with the same month in 2016, slightly faster than the 0.2% drop seen in June 2017.

The data points to the third consecutive monthly decline in consumer spending, representing the longest falling streak in over four years. Visa has attributed the figure to an increasing number of households feeling the squeeze from rising prices and slow salary growth.

Kevin Jenkins, Visa UK & Ireland Managing Director, said: “The drop in spending was felt across a broader range of retail sectors last month, with clothing, household goods, food and transport among the worst hit.”

Staff shortages ‘are pushing up pay’

Employers across the UK are finding it more difficult to recruit new members of staff, leading to rising salaries for both permanent and temporary staff.

This is according to a survey of employment agencies carried out by Markit for the Recruitment and Employment Confederation, which pointed to a tightening in the UK labour market, meaning businesses are finding it more difficult to fill certain roles.

The monthly survey looked at the experience in July 2017 of 400 UK recruitment and employment agencies, and the findings revealed there was “robust demand” for staff, with the number of applicants placed in permanent jobs and temporary contracts growing at their fastest rate for more than two years.

The report suggested that pay rates for permanent jobs are now rising as a result, reaching a 20-month high. However, this is at odds with recent official data from the Office for National Statistics, which indicated that the growth of average weekly earnings across the UK has slowed in recent months.

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