Today, data released by Hometrack showed that the average asking price for a house in the UK inched up 0.1% m-o-m in August, maintaining the pace from July. On y-o-y basis, prices were up 5.5% as against 5.8% in the previous month.

Yesterday, the British Chambers of Commerce (BCC) raised the UK’s GDP growth forecast for 2014 to 3.2% from 3.1% earlier. The agency ascribes this upgrade to higher consumer spending amid lower unemployment. For 2015, the growth outlook is upgraded to 2.8% from 2.7%. Meanwhile, the BCC downgraded the projection for export growth to 0.8% from 1.6% earlier.

Results of a survey by MNI and Westpac indicated that the consumer sentiment index in China slid 1.3% m-o-m to 113.3 in August from 114.8 in July. The reading was down 2.4% on y-o-y basis. Of the five components of the index, three declined compared with the preceding month.

On Monday, Ukrainian President Petro Poroshenko dissolved the parliament and announced early elections on 26th October. The decision comes after the country’s majority coalition separated on 24th July.

Esther George, a senior Fed official, stated the US economy was prepared for a rate hike. She believes stabilised inflation and achievement of near full employment levels imply a conducive environment for raising rates. Charles Plosser, another Fed official, echoed the sentiment, stating the central bank’s policy of retaining near-zero rates could be risky.

The preliminary reading of China’s manufacturing purchasing managers’ index (PMI), released by HSBC, showed the sector continued to expand in August, albeit at a slower pace. The PMI fell to a three-month low of 50.3 in August from 51.7 in July. The reading was below the market forecast of 51.5.

Yesterday, Argentina’s President Cristina Fernandez announced that the government would offer a voluntary debt swap on its defaulted debt. The new bonds issued under the deal would be covered under the national law. The government is yet to secure congress approval for this arrangement. If the proposal goes through, Argentina would be able to service its debt within the country and the bondholders would have a choice of getting their debt governed under the US or Argentina law.

The US housing market index rose to 55.0 in August, its highest level since January, from 53.0 in July, as stated by the National Association of Home Builders (NAHB). This is primarily ascribed to increased employment and low mortgage rates, coupled with affordable home prices. The gauge of current sales conditions and expectations for future sales rose by two points each to 58.0 and 65.0, respectively. The index measuring prospective buyer traffic improved by three points to 42.0.

Today, Rightmove reported the average asking price for a house in the UK lowered 2.9% m-o-m to £262,401 in August, marking the biggest decline for that month. House prices fell 0.8% m-o-m in July. On y-o-y basis, prices were up 5.3%, after rising 6.5% in the previous month.

After more than a years break rental bills are once again rising more than inflation. According to LSL Property Services as the market picked up during the 12 months to July, the average monthly rent across England and Wales has increased by 2%. The pace thus became higher than the 1.9% rate of inflation. Coinciding with the release of these reports, The Resolution Foundation released a study stating that almost 1.6 million UK households were seeing more than half their disposable income taken up with rent or mortgage costs.

In the UK, the monthly house price balance eased to 49 in July, from a downwardly revised 52 in June, as reported by the Royal Institution of Chartered Surveyors (RICS). The reading was below the market expectation of 51. The moderation in house prices was primarily due to the strict mortgage lending norms.

Budget deficit in the US contracted 3% y-o-y to US$95.0bn at the end of July, better than the market forecast of US$96.0bn deficit. From October to July, budget deficit fell 24% y-o-y to US$460.5bn. For the 10-month period ended July, Federal receipts rose 8% to US$2.47trln, whereas spending inched up 1% to $2.93trln.

Data from the British Retail Consortium revealed that like-for-like (LFL) sales in the UK edged down 0.3% y-o-y in July after dropping 0.8% in June. However, total sales increased 1.3% in July from 0.6% in June. For the three months ended July, food sales fell 3.5% q-o-q, whereas non-food sales advanced 2.4%. Growth in the non-food category was led by furniture sales, which recorded its fastest rate of increase since January 2014 (excluding the impact of Easter holidays).

In China, the National Bureau of Statistics revealed that consumer prices edged up 0.1% m-o-m in July, after slipping 0.1% m-o-m in the preceding month. On y-o-y basis, prices rose 2.3% in July, in line with June as well as the market expectation. The reading is below the annual target of 3.5%, indicating room for further monetary easing.

Consumer credit in the US rose US$17.3bn to US$3.17trln in June (below estimates of a US$18.5 increase) following a US$19.6bn gain in May, as reported by the Federal Reserve. Growth in auto and home loans, reflecting improving employment, led to an increase in consumer borrowing.

The National Institute of Economic and Social Research (NIESR) reported that the UK economy’s growth slowed to 0.6% q-o-q in the three months to July from 0.8% in the three months ended June. The annual growth forecast for 2014 was upwardly revised to 3%, while that for 2015 was pegged at 2.3%.

The British Retail Consortium (BRC) revealed that shop prices in the UK dropped 1.9% y-o-y in July (recording the steepest decline since the survey began in December 2006) after falling 1.8% in June. Food price inflation eased to a record low of 0.3% in July from 0.6% in the previous month, while non-food deflation improved to 3.3% from 3.4%.

Today, a survey by Markit Economics indicated that the services purchasing managers’ index (PMI) for China slid to 50.0 in July from June’s 15-month high of 53.1. The reading, which was the lowest in almost nine years, indicated a sharp decline in growth of the country’s service sector and raised concerns about its overall economic recovery. Service sector accounts for around 45% of the country’s gross domestic product (GDP).

Portugal’s central bank decided to rescue Banco Espirito Santo (BES), the country’s largest listed bank. As per the plan, BES would be split into two parts: Novo Banco, a ‘good bank’ hosting healthy assets, and a ‘bad bank’ housing all exposure to the Espirito Santo group. Novo Banco would be recapitalised for up to €4.9bn. The interests of depositors of the original bank and senior bondholders would be protected. Losses of the bad bank would be borne by BES’s junior bondholders and shareholders.

Data from HSBC and Markit Economics indicated the final Chinese manufacturing PMI came in at 51.7 in July, up from 50.7 in June, signalling rapid expansion. The reading, however, was below the flash estimate and economists’ forecast of 52.0. Meanwhile, the official Chinese manufacturing PMI recorded a 27-month high of 51.7 from 51.0 in the preceding month, better than the expectation of 51.4.