The unwinding
Similar patterns are playing out in several housing markets, though explosive rates of growth take time to unwind.
On an annual basis, house prices are declining in just two of the 56 countries and territories Knight Frank tracks in their Global House Price Index - Malaysia and Morocco. Almost half are still registering double-digit price growth.
The chart below offers some perspective on the pace of cooling in various markets during the most recent six months. Australia, New Zealand and Canada are all in the process of tightening monetary policy and the European Central Bank, which has been famously hesitant so far, is expected to make its first move in eleven years next month.
As Knight Frank Head of International Residential Research Kate Everett-Allen notes this morning, we expect a soft landing in most of these markets due to a mixture of supply constraints, robust household balance-sheets and a greater willingness on the part of homeowners to spend more on their living arrangements following stringent lockdowns.
Brexit
The European Central Bank is engaged in a long-running spat with the Bank of England over banking jobs in the wake of Brexit. Essentially, UK banks can no longer serve EU institutions via "passporting", so staff that relied on it before Brexit would need to move to a member state to continue operating as before.
The ECB concluded a "desk-mapping study" last month that suggested about one in five trading desks “warranted targeted supervisory action,” meaning the ECB thinks they should be located in a member state under its supervision. By all accounts, London-based staff are reluctant to move - see this report in yesterday's Telegraph.
Is the sustained push-back a sign that London's dominance in financial services is so entrenched that it can't be challenged, or is the ECB's persistence all part of the slow puncture for the City of London that commentators have predicted?
It's going to be years before we know - this is going to be a slow, grinding process - but whether its data on jobs or investment, all signs point to the City's enduring resilience. EY this morning published its latest rankings of overseas direct investment into financial services, and the UK retained its top spot, though the gap to France in second place narrowed. Britain was also seen as the most attractive European country for future financial services investment, ahead of Germany in second and France in third.
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