In recent months there have been more encouraging signals on house prices. As is normal at this stage of the cycle the reported data is both volatile and variable making a proper assessment fraught with difficulties. We know that actual house purchase and mortgage volumes remain subdued and more importantly constitute a very different mix of transactions compared to 12 or 18 months ago.

The events of the last two years have put economic models and model performance in the spotlight in both academic and policy circles. Serious questions are being asked about how well economic models have coped with the deep recession and the structural and policy shifts we have all experienced in recent years. Academic research highlights that at times of significant change the structural parameters in major economic relationships tend to shift and this requires careful handling.

The increased emphasis on extreme stress testing and risk information has put many organisations in a spin. Keeping track of the latest stress tests and the base data used to produce the results is no easy feat and making the most of the results for your business is even harder. In many cases the process of stress testing and running of scenarios has become rather mechanical and somewhat distant from matters of direct importance to customers. Risk managers and economists really enjoy the process but what is it in for the customer and for the bank in the longer term.

2009 will be remembered as the year when the UK economy finally bottomed out at a level 6% lower in GDP output terms than at the peak in 2007. Last year represented the worst year for GDP output growth since 1921 and considerably weaker than in the early 1980’s and 1990’s. So where does this leave us for 2010 and beyond. It looks increasingly likely that this year will be seen as representing the stable base for a more sustained recovery in 2011 and 2012.

2009 is likely to be remembered as the major turning point in the mortgage market. House prices have now broadly stabilised and house purchase mortgage lending has finally picked up from the record lows experienced in early 2009.

The 33rd quarterly Financial Activity Barometer commissioned from GfK NOP by financial research specialist JGFR finds prospective consumer financial activity this summer weaker than in the spring quarter.

High earners confidence rose 1 point in June and is up 5 points on a year ago. The GfK headline measure fell by 1 point to –19, its fourth successive decline.

GfK consumer confidence is down 1 point to –19, the fourth successive monthly decline; the Nationwide CCI fell 5 points to –64, its lowest since a year ago.

In recent months commentators have begun to become more optimistic about UK economic prospects. The often cited purchasing manager surveys and signs of improvement in consumer confidence are frequently stated as reasons to be optimistic about the prospects for the UK housing and mortgage market. Arrears and repossessions seem to have peaked at lower levels than generally expected 12 months ago and considerably lower than the record highs seen in the early 1990’s.

One thing that has become clear in the wake of the financial crisis is that, warranted or not, financial services and retail banks especially have garnered the reputation for obduracy and obfuscation.