House price fall eases

Recent economic surveys have suggested the worst downturn in decades in Britain could be coming to an end, but policymakers are concerned any recovery could be sluggish because households and businesses are struggling to find reasonably priced credit.

"It's a relatively positive set of housing and consumer data which sits well with our view that the Bank of England will signal it has committed enough stimulus for now in tomorrow's Inflation Report," said Richard McGuire, a strategist at RBC Capital Markets.

The Royal Institution of Chartered Surveyors said its seasonally-adjusted monthly house price balance of surveyors reporting a rise in prices versus those reporting a fall rose to -8.1 last month from -17.6 in June.

That was the highest since August 2007 -- when the credit crunch first gripped hold of world markets -- and marks a run of improving figures since the start of the year which indicate prices could soon start to rise on the RICS gauge.

"The latest survey provides more evidence that activity in the housing market is picking up, albeit from historic lows," RICS said.

Newly agreed sales are also on the up, with the highest reading since August 1999, and the ratio of sales to the stock of property still on the market -- often used by analysts to predict future price movements -- rose for a seventh month.

A broadly improving month also saw price expectations rise, with four out of the survey's 10 regions expecting an increase in house prices.

Government data published separately reinforced the view that housing market weakness is be tailing off. The Department for Communities and Local Government said house prices fell 10.7 percent in June compared with a year earlier.

Other official data showed Britain's trade deficit widened slightly more than expected in June to 6.451 billion pounds, but analysts said that did not alter the trend of an improving trade balance and augured well for second-quarter GDP.