US consumer spending, UK housing market resilient

The US Commerce Department reported yesterday that personal income rose by 0.5 percent in September while personal consumption expenditures (PCE) increased 0.1 percent. A 0.3 percent fall in the PCE price index -- thanks to falling gasoline prices -- means that both income and spending posted quite decent gains in real terms in September. The core PCE price index also decelerated to a 0.2 percent gain compared with an increase of 0.3 percent in August.

The improvement in inflation hasn't changed Jeffrey Lacker's view on interest rates. From Reuters:

The U.S. economy is on solid enough ground to withstand further interest rate hikes if the Federal Reserve has to curb stubbornly high inflation, Richmond Federal Reserve President Jeffrey Lacker said in a speech on Monday.

"The economy is resilient enough right now to withstand further tightening," he said, adding that this comes despite the slowdown in the housing market.

Well, the consumer at least does appear resilient enough.

But an imminent interest rate hike looks more likely in the UK. From Reuters:

British mortgage approvals hit their highest level in more than two years in September -- another sign this summer's surprise interest rate hike has done little to cool the housing market...

The BoE data also showed consumer credit rose more than expected in September, by 924 million pounds ($1.75 billion) compared with a forecast for an 800 million pound gain.

Mortgage lending, however, rose slightly less than expected, by 8.928 billion pounds last month. That was still more than the 8.763 billion pound increase in August.

The BoE also published final M4 money supply data, showing the annual rate was unrevised at 14.5 percent, the highest since September 1990.

And this as British house prices rose at their fastest annual pace in more than two years in October.