While Jerome Powell’s Federal Reserve continues to debate whether to cut rates, two central banks in Europe are already witnessing economic progress from their respective rate cuts.
The Bank of England’s first rate cut in four years sparked a renewed interest in homebuying, according to data from Rightmove, the UK online property portal.
The London Evening Standard reported that UK estate agents witnessed a 19% increase in prospective buyers since Aug. 1 compared with the same period last year. The figure also marked an increase from the 11% year-on-year upswing recorded in July.
“While mortgage rates aren’t yet substantially lower since the rate cut, the fact that the long-hoped-for first cut has finally arrived, and mortgage rates are heading downwards, is positive for home-mover sentiment,” said Tim Bannister, Rightmove’s director of property science.
While buyer inquiries grew, Rightmove found the average new-seller asking price dropped by 1.5% in August to roughly $478,000.
Separately, Sweden’s central bank announced a 0.25 percentage point cut in its policy rate to 3.5%, with the prospect of more to come. This is the second rate cut enacted since May.
“If the inflation outlook remains the same, the policy rate can be cut two or three more times this year, which is somewhat faster than the Executive Board assessed in June,” said the Sveriges Riksbank in a press statement. “Inflation has continued to fall and the prospects for inflation being in line with the target going forward are good. Long-term inflation expectations are signaling strong confidence in the target and wage increases are moderate.”
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