House Prices Continue To Rise.

House price bounce extends into August.

• House prices rose by 1.6% in August
• Year-on-year decline slows from -6.2% to -2.7%
• Low interest rates helping to underpin prices for the moment

Average UK House price now £160,224

Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:

“The price of a typical house rose for the fourth consecutive month in August, increasing by 1.6% on a seasonally adjusted basis. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – rose from 2.7% in July to 3.3% in August, the highest level since February 2007. At £160,224, the average price of a typical UK property is still slightly lower than 12 months ago. However, the annual rate of change rose further in August, from -6.2% to -2.7%. Over the first eight months of 2009, the seasonally adjusted index of house prices has risen by 3.2%, though relative to the October 2007 peak it is down by 14.4%.

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Working In & Through Retirement

More than two thirds of UK retirees are estimated to be either working, considering a return to work, or upping their hours as a result of the downturn.

A survey, conducted by financial technology group 1st - The Exchange, who questioned 2,000 people in retirement age, found that 70% of them were either working or considering working in retirement, directly because of the double whammy of the ongoing recession and a lack of pension savings.

The results are a timely reminder of the dire straits that many retirees and pension savers are presently in.

Paul Yates, at 1st – The Exchange, said: 'With news this week that a further one million workers are facing inadequate retirement provision due to the closure of many final salary pension schemes by 2012, the situation is only likely to get worse.'

A separate study from annuity group MGM Advantage has found that the impact of the economic downturn on pension pots has forced more than a third of people of 55 – almost 2m - to put off their retirement plans and continue working.
In its research, 1st - The Exchange, found that more than half of retirees, at 53%, are already working full or part time in order to supplement their pension, of which 10% are looking to extend their hours.

Another 17% are considering returning to work because their existing pension is not enough to see them through retirement.

In addition, 28% of men expect to work for 10 years after retirement until at least the age of 75 and 13% of these expect to work for longer, almost half, at 49%, of women anticipate that they will have to work 10 years after retirement up to the age of 70.

Source: thisismoney

Fund Managers Optimism

Fund managers' optimism about the global economy is at its highest level in nearly six years, according to the Merrill Lynch Survey of Fund Managers for August. Now I know you would expect them to be optimistic but this time I think they might actually believe it.

Seventy-five per cent of respondents said they believed the world economy would become stronger over the next 12 months, up from the 63 per cent recorded in July and the highest figure since November 2003. Further, 70 per cent of respondents expected global corporate profits to increase in the coming year, up from 51 per cent last month.

The survey showed managers were also putting their cash back into equities. Equity allocations have risen sharply, with 34 per cent of respondents now overweight in the asset class compared with 7 per cent in July.

Michael Hartnett, chief global equities strategist at Banc of America Securities-Merrill Lynch Research, said: "Strong optimism in August represents a big turnaround from the apocalyptic bearishness of March. But with four out of five investors predicting below-trend growth for the year ahead, a nagging lack of conviction about the durability of the recovery remains. "We have yet to see investors fully embrace cyclical regions such as Japan or Europe, or Western bank stocks."

Within Europe, 66 per cent of respondents expected the European economy to improve in the next 12 months compared with 34 per cent in July. Investors in Europe took overweight positions in basic resources and radically reduced their overweight in pharmaceuticals. The survey also found that European managers had increased their cash positions, while their overall sector conviction esd near record lows.

Separately, global equity fund managers are waiting for fundamentals to catch up with the recent market rises before making any substantial policy changes, according to the latest annual review of global equity funds from Standard & Poor's Fund Services. The firm said the market upheaval led to a general move toward developed markets, defensive sectors and larger companies.