The latest house price index from the Nationwide Building Society has revealed prices rose by 0.4% in October on a monthly basis.

On an annual basis, house prices are now 0.8% higher than this time last year – representing the first yearly rise in six months – with the average UK home costing £165,650.

However, when comparing prices in the three months to the end of October with the previous quarter (which is a more reliable indicator), prices fell by 0.2%.

According to the Nationwide, today’s figures suggest the housing market is still “treading water”.

Nationwide’s chief economist, Robert Gardner, comments: “The outlook remains uncertain, but with the UK economic recovery expected to remain sluggish, house price growth is likely to remain soft in the period ahead, with prices moving sideways or drifting modestly lower over the next 12 months.”

In other housing market news this week, property website Hometrack said weak demand drove house prices down 0.2% last month and warned of a downward trend in house prices in the coming months.

Also this week, the Bank of England revealed mortgage approvals fell in September for the first time in six months.

According to the Bank, there were 50,967 loans approved in the month – down 3% on August’s figure.

However, September’s figure was broadly in line with forecasts and suggests the UK mortgage market will remain subdued for some time to come.

Approvals still remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

Meanwhile, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in September in the UK.

According to HMRC, 72,000 homes worth at least £40,000 or more were sold in the month – the second consecutive monthly decline and way below the July peak of 83,000.

At the height of the housing boom in July 2007, 151,000 homes were sold.

In an interim management statement today, banking giant Barclays said profits climbed 5% in the third quarter – boosted by cost-cutting measures.

For the three months to the end of September, the bank said pre-tax profits were £1.34 billion, versus £1.27 billion for the same period a year earlier.

However, revenues for the three month period were down 3% at £7 billion, as a result of “significant economic and market headwinds”, the bank said.

The bank, which is one of the few not to have received any financial help from the Government, said profits declined at its main investment banking unit, Barclays Capital, with profits 49% lower at £388 million.

For the nine-month period to 30 September, meanwhile, the bank’s group-wide profits rose 18%.

Commenting on the figures, Barclays chief executive Bob Diamond, said: “Our focus on cost reduction continues to deliver results and we are confident that we will exceed the £1bn savings target we set earlier this year.”

Talking about its exposure to the euro zone debt crisis, Mr Diamond said it was monitoring this.

It said the bank’s sovereign exposure to Spain, Italy, Portugal, Ireland and Greece reduced by 31% to £8 billion in the three month period.

Finally, the bank said it remains committed to UK lending and is on track to exceed its target, as set out in the Project Merlin scheme, agreed earlier this year.

Official figures have revealed consumer spending in the US improved last month.

According to the Commerce Department, consumer spending rose 0.6% to $68.7 billion (£42.7 billion) in September and follows a 0.2% rise in August.

The figures will be a welcome boost for the economy which looked set to be heading towards a double dip recession just a few weeks ago.

Consumer spending is closely monitored as it accounts for more than two-thirds of economic output.

However, personal incomes rose just 0.1% in the month after a 0.1% gain in August, the Commerce Department said.

Income growth is being limited by stubbornly high unemployment, with a jobless rate that has been above the 9% mark for five consecutive months.

The figures come just a few days after the Commerce Department revealed the world’s largest economy expanded at its fastest pace in a year in the three months to the end of September.

The US economy grew at an annualised rate of 2.5% in the third quarter of this year, which was in line with forecasts but was a considerable improvement on the 1.3% growth reported for the second quarter.

However, despite both sets of encouraging figures, it appears that consumers are still wary about the future direction of the economy.

Last week, the Conference Board revealed US consumer confidence slumped in October.

The closely-monitored Consumer Confidence Index from the Conference Board dived to 39.8 this month from September’s reading of 46.4.

Not only was the reading less than forecasts of a level of 46.0, it was the lowest since March 2009, when the US was in recession.

The economic recovery in the US has so far been sluggish in the face of rising unemployment and a depressed housing market.

The Reserve Bank of India (RBI) has today raised key interest rates for the thirteenth time since March 2010, in a bid to tame stubbornly high inflation.

The central bank lifted its main rate to 8.5% from 8.25% as inflation soars on the back of higher food and fuel prices and the measures were widely expected.

Figures recently revealed India’s wholesale price inflation rose to 9.72% last month on an annual basis – significantly above the central bank’s target of between 4% and 5%.

This represented the tenth consecutive month that inflation has been above the 9% mark.

Inflation reached a two-year high earlier this year of 10.16%, after food, fuel prices and manufactured goods surged – the highest among the Group of 20 leading nations.

Annual food inflation has surged, causing major problems for the 450 million people who live below the poverty line in the country.

However, economists say that the RBI has a difficult task to bring inflation down amid signs of slowing growth.

Prime Minister Manmohan Singh has previously said inflation is a “serious threat” to the country’s growth.

It is currently the world’s second fastest-growing major economy, behind China. However, the central bank has slashed its growth forecast from 8% to 7.6% for the fiscal year that ends next March.

In a statement, the RBI said: “Slower global growth will have an adverse impact on domestic growth, particularly on industrial production, given the rising inter-linkages of the Indian economy with the global economy.”

In the meantime, the RBI warned that inflation will remain high in the short-term.

“Inflation is broad-based and above the comfort level of the Reserve Bank. Further, these levels are expected to persist for two more months,” the bank added.

Inflationary pressures are rife throughout the world, particularly in Asia, and many central banks are hiking interest rates in order to tame inflation.

A survey by LSL Property Services has revealed rents in England and Wales continue to surge, with the average rent hitting a further record high last month.

September represented the eighth consecutive month that the average rental cost rose.

Lenders’ deposit requirements, together with unaffordable house prices, has meant the rental sector has been in high demand and this has driven up prices.

According to LSL, the average rent stands at £718 – an all-time high – with rents rising by 4.3% in the last year alone.

Rents increased fastest in the South East and the East Midlands, up by 1.8% and 1.1% respectively on a monthly basis.

However, rents are on an upward trend across the country and it is unlikely that tenants will gain respite any time soon, explains David Newnes of LSL.

Research shows many tenants in rented properties would like to get a foot on the property ladder but are unable to do so unless they have a deposit of around 20% in order to secure a mortgage.

Mr Newnes comments: “In many cases, buying a home is now cheaper on a monthly basis – provided renters can get past the stumbling block of the substantial deposit requirements.

“For the majority, saving a £25,000 deposit is a Herculean task as inflation and rents climb – and most would-be buyers are biting the bullet and prolonging their stay in increasingly costly rental accommodation.”

In the meantime, tenant arrears improved, dropping to their lowest level in almost 18 months, with 8.6% of all UK rent unpaid or late by the end of September, down from 10.7% in August.

Despite the improvement, tenants will face mounting pressure over the medium term, particularly as inflation remains high and public sector job losses take effect.

In related news, housing charity Shelter recently said private rents had become unaffordable in 55% of council areas in England.

The Office for National Statistics (ONS) has today revealed UK retail sales beat forecasts in September, led by spending on electrical goods such as laptop computers.

According to the Statistics Office, sales rose by 0.6% last month, reversing the 0.4% fall in August.

Furthermore, the figure was 0.6% higher on an annual basis.

Retail sales have been struggling over recent times as households continue to be squeezed by higher inflation, rising unemployment and sluggish wage growth.

As a result, conditions are expected to remain challenging for retailers in the medium term.

Last week, the ONS revealed UK unemployment rose to a 17-year high in the three months to August, while earlier this week, it revealed that inflation surged to 5.2% in September, from 4.5% in August.

These pressures are making consumers cautious about spending, according to analysts.

In order to stimulate the economy and aid the recovery, the Bank of England last week announced it would embark on a fresh round of quantitative easing (QE).

There have been fears that the UK could enter a double-dip recession after a recent series of bad news from the economy and the ongoing debt crisis in the euro zone and the majority of economists expected the central bank to introduce a further round of QE.

However, while the Bank hopes the QE scheme will revive the sluggish economy, leading think tank, the Ernst & Young Item Club, warned earlier this week that the QE measures are unlikely to boost the recovery.

Its comments came just a week after the British Chambers of Commerce (BCC) said the fresh round of QE may not be enough to prevent the economy from slipping back into recession and “more radical measures” are required.

In other news today, UK consumer confidence rose for the first time in four months in September, according to GfK NOP research company.

The Chartered Institute of Purchasing and Supply (CIPS)/Markit manufacturing purchasing managers’ index (PMI) has today revealed UK manufacturing activity bounced back last month.

The closely-watched CIPS/Markit manufacturing PMI rose to 51.1 in September from August’s reading of 49.4.

Activity has contracted for the last three months and today’s survey means the index has moved back above the crucial 50 mark – which separates growth from expansion.

The reading was also better than forecasts of 48.6.

The pick-up means the Bank of England is likely to keep interest rates on hold at the historic low of 0.5% when its rate-setting committee meets later this week.

However, Markit revealed that new export orders contracted at the fastest rate since May 2009, while employment fell for the third consecutive month.

Commenting on the figures, Markit economist Rob Dobson, said: “The modest return to growth of UK manufacturing output in September is a positive, but it is hard to escape the fact that the sector’s performance has weakened substantially since the opening quarter’s growth surge.

“The data suggests that the positive contribution of manufacturing to the broader economic recovery is likely to remain modest, at best, through the remainder of the year.”

The manufacturing sector accounts for around 13% of economic output.

Construction activity and service sector activity figures will be published later this week.

In other news today, it emerged that manufacturing in the euro zone contracted at the quickest pace in two years last month.

Markit’s PMI fell to 48.5 in September from August’s reading of 49 – meaning the index is below the crucial 50 level.

The news comes as the 17-member nation struggles with the debt crisis and shares have fallen this morning as fears grow that Greece will be unable to avoid defaulting on its debts.

Manufacturing activity in Greece contracted for the 25th consecutive month, Markit said, while powerhouse Germany, also saw activity grind to a halt.

Japan’s industrial output recovered further last month after a record drop in March due to the earthquake and tsunami.

Disruptions caused by the twin disasters resulted in carmakers being forced to halt production as a result of parts shortages.

However, it looks as if the situation continues to improve after output rose by 0.8% last month compared with July, figures from the Finance Ministry showed today.

August represented the fifth consecutive monthly increase but was lower than analysts had expected.

However, the outlook remains uncertain as the yen continues to strengthen, and threatens the recovery of the world’s third largest economy.

A strong yen makes Japanese exports more expensive to overseas buyers.

The currency has been appreciating for some time as global investors see it as a safe haven at a time of economic uncertainty.

However, it has implications and it is forcing manufacturers to consider relocating and some have even suggested moving their operations overseas.

The Government announced it will continue to monitor foreign exchange traders’ positions in order to deter currency speculation – which is the latest intervention by the Government as it seeks to weaken the currency.

In related news this week, Japan’s retail sales slumped last month, which has led many analysts to question the strength of the recovery.

Retail sales fell 2.7% in August on an annual basis – much worse than the 0.6% expected by analysts.

In other news, Japan’s core consumer price index (CPI) rose 0.2% in August on an annual basis, and was up 0.1% compared with July, official data showed today.

Analysts had been expecting an annual rise of 0.1%.

In the meantime, the country’s unemployment rate fell to 4.3% from July’s 4.7% – forecasts were for the rate to remain unchanged.

In comparison, unemployment in the US stands at 9.1%, the UK’s rate is 7.9%, while in the euro zone, it is 10%.

According to Spencer Dale, the Bank of England’s chief economist, UK inflation is set to accelerate due to soaring energy bills.

The latest figures from the Office for National Statistics (ONS) revealed UK Consumer Price Inflation (CPI) rose to annual rate of 4.5% in August from July’s rate of 4.4% – more than double the 2% target.

Higher inflation continues to be led by rising food costs but the main reason behind last month’s rise was a 5.1% annual increase in the housing, water, electricity and gas component – which rose the most in more than two years.

Utility companies recently hiked their prices – some by almost 20%.

The Bank of England has previously warned that inflation could reach 5% later this year but Mr Dale, who is also a member of the Bank’s Monetary Policy Committee (MPC), said households will be financially squeezed even further this autumn as energy bills surge.

A recent study by supermarket giant Asda warned that households are already £728 a year worse off than they were this time last year due to soaring living costs and in an interview with the Daily Mail, Mr Dale said families should be prepared for further hardship in the next few months.

Mr Dale warned that inflation could exceed the 5% mark and should it rise to 5.5%, it would represent the highest level since 1992.

However, he is predicting that inflation will fall “very sharply” next year, while the Bank of England has previously reiterated that inflation will fall back to its target by 2013.

For several months, Mr Dale voted for interest rates to be lifted from their historic low of 0.5% in an effort to tame stubbornly high inflation but in July, he joined his fellow Committee Members by opting to keep rates low as the UK economic recovery appeared to be losing momentum.

The Bank of England has today revealed mortgage approvals picked up significantly in August to a 20-month high.

According to the Bank, there were 52,410 loans approved in the month – almost 3,000 more than the level seen in July and the highest figure since December 2009.

The figure was also higher than the 49,500 expected by analysts.

However, approvals still remain well below levels seen prior to the financial crisis.

Since the early 1990s, mortgage approvals have averaged around 90,000 a month but the credit crunch saw a tightening of lending criteria and many have been unable to secure a mortgage unless they have a significant deposit.

In other news today, the latest house price index from the Nationwide Building Society has revealed prices rose by just 0.1% in September on a monthly basis.

On an annual basis, house prices are now 0.3% lower than this time last year with the average UK home costing £166,256.

Meanwhile, when comparing prices in the three months to the end of September with the previous quarter (which is a more reliable indicator), prices were unchanged.

The latest figures suggest the housing market will remain subdued as a lack of buyers, together with the ongoing lack of mortgage availability, means demand for housing is weak.

The Nationwide’s chief economist, Robert Gardner, comments: “Sentiment towards major purchases is depressed, as a result of weak labour market conditions and ongoing pressure on household budgets from above-target inflation.”

Mr Gardner expects prices to remain relatively stable throughout the remainder of the year but cautioned that the outlook had “darkened” due to the euro zone sovereign debt crisis which is denting confidence and driving up banks’ funding costs.

Also this week, HM Revenue & Customs (HMRC) revealed a fall in the number of homes sold in August in the UK.

According to HMRC, 78,000 homes worth at least £40,000 or more were sold in the month – 6,000 less than the previous month and 3,000 lower than in August 2010.

However, August is traditionally regarded as a quieter month due to the holiday season.

At the height of the housing boom in July 2007, 151,000 homes were sold.