The GBP AUD exchange rate was 0.22% higher on Thursday as the pound sterling retains a bid against the Australian dollar. The pound was boosted by steady housing prices, although slowdown fears persist. The UK’s FTSE share index also shrugged off deeper losses in global stocks due to oil and mining stocks.
The GBP to AUD rate vaulted above the 1.7660 but the pair looks like it is waiting for a larger price catalyst.
Australia’s Volt bank collapses with customers urged to remove funds
An Australian online bank collapsed with 6,000 customers looking to withdraw their funds immediately.
Volt Bank announced on Wednesday that it was closing its deposit business. It will return its banking licence after the firm ran into problems staying afloat.
“Volt has made the difficult decision to close its deposit taking business and has commenced the process of returning all deposits to its account holders,” according to the website.
“We’ve built something as a team that Australia really needs to bring banking competition to the market. We’ve got technology and capability that simply doesn’t exist in Australia today,” the founder said.
“But for us to take that to a public launch… we need capital. And in the current market, being able to raise the amount of capital that we needed to be able to scale up was a task that we couldn’t accomplish.”
The development highlights the issues facing technology companies with interest rates rising. As capital moves to safe havens, the rise in fintech may slow down.
UK house prices holding up, but a downturn may come later
House prices in the UK came in at a 10.7% annual gain which was near analysts’ expectations. However, there may be worse to come when interest rates and inflation filter through.
Nationwide’s chief economist, Robert Gardner, said:
“The market is expected to slow further as pressure on household finances intensifies in the coming quarters, with inflation expected to reach double digits towards the end of the year.
Moreover, the Bank of England is widely expected to raise interest rates further, which will also exert a cooling impact on the market if this feeds through to mortgage rates,” he added.
Guy Harrington, CEO of Glenhawk finance, told the Guardian that 2023 looks “increasingly ominous.”
“Another month of slowing growth is just a precursor to the sharp correction about to torpedo the UK housing market, caused by a perfect storm of record inflation, geo-political turmoil, rising rates and a once-in-a-generation cost of living crisis.”
Global stocks had a tough first half of the year, with MSCI’s All-Country World Index slumping 20% since the start of 2022, as central banks tighten their belts.
The number marks the worst opening six months since the index started in 1990, with $13trn lost from share values.
Britain’s FTSE 100 index was in better shape with a 3% loss this year. Oil and mining companies boosted the UK index due to higher commodity prices.
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