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Geopolitical instability and the uncertain outcome of the Brexit vote could delay any move in interest rates and cause UK growth to slow, Nationwide Building Society has warned.

The UK’s second largest mortgage lender said that although the UK’s moderate economic growth should continue to support the housing market, the global picture is more uncertain.

As a result it now does not expect the Monetary Policy Committee to increase interest rates until late 2016 at the earliest. Nationwide pointed to geopolitical instability and rising concern over the growth of China and oil producing nations as risk factors for UK growth.

“In a UK context, in the short term this uncertainty may be compounded by the EU referendum,” the building society said.

Nationwide’s concerns came as it unveiled a strong set of financial results in which profits for the last nine months of last year grew 19pc from the same period in 2014 to £1,123m.

The mortgage lender said its gross and net residential mortgage lending increased 16pc and 18pc respectively. In addition, member deposits increased by 29pc and new current account openings increased 13pc.

Nationwide’s outgoing chief executive Graham Beale said: “As a building society, our primary focus is on our members, and notwithstanding the continued low interest rate environment, we will continue to invest in the Society and our member proposition going forward.”

The group said it expects the level of profit to moderate as mortgage assets reprice to prevailing rates. “Improving household finances will continue to support both domestic demand and a relatively stable outlook for the housing market,” Nationwide said.

But the “mixed” global picture could cause the UK economy to grow “at a slightly slower rate”. Mr Beale is set to step down from the group on April 5, and will be replaced by BT’s Openreach boss Joe Garner.

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