Aurelia Butler

Single-family housing starts, which account for the bulk of homebuilding, rose 2.7% to a seasonally adjusted annual rate of 861,000 units last month, the Commerce Department said on Tuesday. Data for February was revised higher to show single-family homebuilding rising to a rate of 838,000 units instead of the previously reported 830,000 unit-pace.The Federal Reserve’s aggressive interest rate hiking campaign has pushed the housing market into recession, with residential investment contracting for seven straight quarters, the longest such streak since the collapse of the housing bubble triggered by the 2007-2009 Great Recession.There are, however, signs that the housing market is stabilizing at very depressed levels. A survey on Monday showed the National Association of Home Builders/Wells Fargo Housing Market index climbing to a seven-month high in April.Mortgage rates have retreated from last year’s highs, with the rate on the popular 30-year fixed mortgage declining from a peak of 7.08% in early November to 6.27% last week, according to data from mortgage finance agency Freddie Mac (OTC:FMCC). But the recent financial turmoil following the collapse of two regional banks could result in banks and mortgage lenders tightening underwriting standards. Single-family building permits jumped 4.1% to a rate of 818,000 units in March. More

EV startups have been struggling with dwindling cash balances and production challenges as access to capital tightens amid rising U.S. interest rates to tame inflation.Ohio-based Lordstown, whose shares were trading 1% higher premarket, also said it has struck a deal under which Amerit Fleet Solutions will provide service and maintenance for its fleet customers.The company said in February that it had made only 31 units for sale, and recalled 19 vehicles delivered to customers and those that were being used internally.In January, the EV company forecast production would slow through its first quarter due to supply-chain constraints, particularly with respect to the availability of hub motor components. More

Corporate insolvencies in England and Wales rose 16 per cent in March compared to the same month last year, as businesses struggled with higher costs and a weakening economy.The number of filings hit 2,457, according to the latest figures from the Insolvency Service, the highest monthly figure since the agency started producing comparable monthly data at the start of 2019. Compared to March 2019 before the Covid-19 pandemic struck, the number of declarations jumped 55 per cent.Christina Fitzgerald, president of R3, the insolvency and restructuring trade body, said businesses were “struggling” with rising costs while consumers were “cutting back on discretionary spending, and when staff [were] requesting pay rises to cover their bills”. In the year to March, creditors’ voluntary liquidations rose 9 per cent to 2,011, while compulsory liquidations more than doubled to 288, according to the data published on Tuesday. Businesses file for the formal process of insolvency when their assets no longer cover their debts or they can no longer finance their borrowing.The rise in filings comes as businesses are facing the highest borrowing costs since 2008 with the Bank of England raising its benchmark rate to 4.25 per cent. Separate official data released on Tuesday underlined the pressures in the labour market with wage growth remaining unexpectedly high in February. At the same time, high inflation has led to the economy stagnating since the middle of last year. Price pressures easing but only slowly with economists polled by Reuters expecting inflation in March to fall to 9.8 per cent when the official data is published on Wednesday — 1.3 percentage points below the 41-year high of 11.1 per cent in October. “Businesses are struggling to secure financing and pay off their loans due to high interest rates and the wider impact inflation and consumer sentiment is having on sales and cash flows,” said David Kelly, head of insolvency at PwC. He expected insolvencies would “likely continue to rise in the short term, making for a challenging spring”.Some £154bn of Covid support from the taxpayer, along with temporary measures that helped companies restructure and avoid entering administration, kept the number of insolvencies low during the pandemic. But the winding up of those measures meant the number of filings had “now returned to and exceeded pre-pandemic levels”, the Insolvency Service said. The data also showed that individual insolvencies rose 2 per cent to 672 in the year to March. Debt relief orders — a measure that offers temporary protection to debtors from certain creditors — rose 35 per cent to 3,383 over the same period. Fitzgerald said that the figures suggested “that the cost of living crisis is having an effect on people’s solvency, but that a greater number are coming to an arrangement with their creditors without requiring a bankruptcy process”. More

PRAGUE (Reuters) – The Czech government needs to dig deeper than it plans to shore up the state budget which has fallen to record deficits, and must act fast as the next election approaches, a senior budget watchdog official told Reuters.The centre-right government of Prime Minister Petr Fiala plans to cut budget deficit by 70 billion crowns ($3.29 billion)next year from the 295 billion gap penciled in for this year as the country emerges from the double hit inflicted by the COVID pandemic and war in Ukraine.The government has been looking to cut spending and raise taxes to find the 70 billion, but Hampl said commitments to raise defence spending and teachers’ salaries add another 45 billion the cabinet needs to find. “In terms of big changes, 2024 is the last window of opportunity”, due to an election coming in 2025, said Mojmir Hampl, chairman of the Czech Fiscal Council, an independent state budget watchdog.Hampl pointed out that the 70 billion crowns represent only one third of the structural deficit – imbalance between budget spending and revenues regardless of the economic situation – estimated by the Council at around 200 billion crowns.The government’s plan is therefore just a first step which needs to be followed quickly by more changes.”It is appropriate, if (the effort) then continues,” Hampl said He backed reform proposals by the government’s body of economic advisors – which Hampl is a member of – including raising personal income taxes by over 100 billion crowns.”The proposals erase the structural deficit completely… I support all of them. The rest is up to the political leadership,” Hampl said.The government has refused to raise personal income taxes – which were cut substantially by the previous centre-left cabinet with parliamentary support from Fiala’s Civic Democrats.It has also declared it would not raise the overall tax burden by more than 30 billion crowns, including increasing the value-added tax on some items. The final proposals should be ready in a month.”The consolidation efforts definitely can’t focus on spending only, that’s not doable,” Hampl said. ($1 = 21.2850 Czech crowns) More