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Eurozone confidence is also on the rise despite the volatility. An index of Eurozone confidence in September rose by 1.5 to 105.6, which was the highest level since June 2011. The Greek election secured the implementation of the €86bn bailout package and moves any “Grexit” talk off the agenda.
In Spain the pace of consumer price inflation in September came in at -1.2% on a year ago. This compares to a 0.7% fall expected and the 0.5% decline in August and as such shows that the ECB’s fight against deflation needs to continue. And in Ireland the rate of unemployment fell to 9.4%, which is a new post-crisis low and compares to 15% in 2012. Irish second quarter growth came in at 1.4% making the country the fastest growing in the Eurozone.
UK mortgage approvals continue to rise which is positive for the housing sector, and stocks we hold such as Barratt Developments and Bovis Homes. The Bank of England released data on Tuesday showing that UK mortgage approvals in August rose to 71,030 – the highest for over a year and a half. The figure was ahead of July’s figure at 69,010 and beat analyst expectations. Mortgage approvals have increased in all but two months of 2015 as the market picks up on 2014. Last year saw the introduction of tougher mortgage approval criteria which led to falling approvals.
Despite the strong mortgage approval data, the share prices of UK homebuilders fell back on Tuesday in line with broader market weakness. A revenue warning from the owner of Plumb Centre, Wolseley, hit sentiment but the fundamentals continue to be robust.
Volkswagen has announced plans to refit cars. The world’s largest carmaker will inform all customers affected that their “emission characteristics…will be corrected.” The technical solutions and measures will be presented the authorities in October. Sales of some models have been halted by authorities in Spain, Switzerland, Italy and Netherlands. Germany has set a 7th October deadline for the group to explain how it will address the issues for the 2.8m cars affected.
