Month of May, 2008

Sterling extended gains against the Euro
this morning while stocks were little changed after data showing Britain's
manufacturing sector had slowed but prices soared, with no let up in
inflationary pressures. The Chartered
Institute of Purchasing and Supply/NTC purchasing managers' index slipped to

Sterling hit a five week high versus the Euro this morning as weak UK housing data was overshadowed by a large euro/sterling sell order, which traders said had a disproportionate market impact due to low liquidity.
 

THERE was an interesting article on www.thisfrenchlife.com earlier this week that should interest those who have holiday homes in France.

Most will have considered nstalling a fixed phone line their french property too big an expense. That may no longer be the case.

France Telecom have a service aimed specifically at second home owners that enables them to switch the line off several times a year. It's not a new service but not a lot of people know that it exists.

WITH every house sale in France comes an obligatory set of reports on the state of a property.

They currently include the results of tests carried out by qualified technicians to detect the presense of lead,asbestos, termites, capricorn beatle and energy efficiency ratings.

THE price of new houses could experience a bigger reduction than older properties this year according to economists at HSBC, report Capital.fr.

In a recent memo HSBC say that "the drop in prices is likely to be greater than anticipated due to oversupply and a decrease in household spending power".

Readjusted, HSBC's expectations now show a decline of 3.5% in the first half of 2008 for new builds, against only 1% for older properties.

THE Governor of the Bank of England, Mervyn King, yesterday announced that UK inflation is set to worsen. He almost seemed shocked by the gravity of his words in admitting that the outlook for UK inflation has "deteriorated markedly."

Consumer inflation is at its highest in 13 months as a result of higher food and energy prices.

These external factors, of course, affect economies globally but Mr. King says, about the UK specifically, that "the central projection is for growth to slow sharply in the near term".

More and more people are now looking towards France and particulary investment in French property as a way of spreading their assets and minimising financial risk.

In a recent blog post we talked about the Bank of England's gloomy forecast for the British economy over the coming 18 months.

But entrerprising Brits have come up with a solution and, at the same time, coined a new acronym.

Sterling rose slightly this week after a smaller than expected fall in UK retail sales and factory orders suggested that the B of E may put off cutting interest rates in coming months as it tackles rising inflation risks.

The Dordogne features among the most popular areas for french property in 2008.

According to this article in The Times the property market in France is "buzzing" at the same time as the Spanish and Irish markets are in free fall.

Despite the love-hate relationship between the British and the French, people feel at home there.

REUTERS - A French Government memo out today reports a drop of 28% in the sale of new houses in france for the first quarter.

The stock of new properties for sale in france is at an all time high according to the french Ministry for Ecology and Energy.

Just over 26,700 news builds were sold in France in the first quarter, 27.9% less that the same period in 2007.

From the second quarter 2007 to the first in 2008 the number of new houses sold was slightly more than 117,000, a drop of 10.3% on the same period a year before.