Just for the record: we seem to have had a bad news week.
The Q4 2011 GDP number has been recalculated and it turns out there was a 0.4% fall rather than the 0.3% fall previously announced. The fall in Q1 2012 is confirmed as 0.3%. We will get the first estimate for the Q2 2012 GDP in a couple of weeks. As has been alluded to in previous posts the politicians seem to be behaving as through this will be a bad number.
House prices have fallen, according to the Nationwide, by 0.6% in a single month. They are not expected to do anything other than keep falling as the Olympics dominates people's thinking, and the economy shrinks. The current annualised rate of house price change is -7.6%.
Also, according to the British Bankers' Association net mortgage lending fell in May by £74m. This is actually a small number but it is the first time ever (or since records began, anyway) that this number has fallen. It means people are repaying more than they are borrowing - which with a base rate at 0.5% is probably a good idea. However this is likely to be indicative of house price falls to come, some say by as much as 15% this year.
The UK, especially the South East of the UK, has escaped a lot of the asset price falls that this financial crisis has inflicted on the rest of the world. For example house prices are down only 5% from the 2007 peak in the home counties compared to over 50% down in Northern Ireland, while in Europe and the USA houses in some areas have lost 80% to 90% of their value. But this local defying of gravity may be about to end.