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The EU has confirmed it is “actively investigating” a potential breach of its diplomatic communications network, following reports that secret cables had been stolen by hackers.

The Bank of England has welcomed a “crucial and positive” move by the EU to help keep a key part of the financial system functioning in the event of a “no-deal” Brexit.

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Santander has been fined more than £30m for “serious failings” in processing the accounts of dead customers, the Financial Conduct Authority (FCA) says.


Local governments in China urged to stabilise the real estate market

The Chinese central government has urged the local governments to make efforts to stabilise land and housing prices, and punish the parties who fail to stabilise the real estate market.

Local governments across China were ordered to evaliare the problems and major risks existing in their respective housing markets, and tailor measures required to stabilise the market expectation – at a meeting held by the Ministry of Housing and Urban- Rural Development in northeast China’s city of Shenyang, the capital of Liaoning Province, on Tuesday.

According to the meeting ,the development of the rental market was encouraged to meet the various needs of resident, while speculative housing purchases were to be curbed by cracking down on illegal developers and agents. The meeting was attended by government representatives from eastern, central and southwestern regions.

A top wealth management bank said in a report Tuesday that property investors in China should hold off on buying and selling homes as the country’s real estate boom hits rockier territory.

Large amounts of mortgage debts, overdevelopment and government involvement have put the country, including its top metropolises, in housing bubble territory, according to a report from UBS’s chief investment office. Government intervention in the Chinese economy will likely prevent a rapid price crash, but investors holding real estate there should brace for a prolonged period of cooling.

Construction and home buying have boomed in the country since 1998, when the government introduced private property ownership.

“Today, both activity and price levels remain at unprecedented heights, despite visible signs of slowing,” according to the report.

Luxury home prices in Guangzhou, Beijing and Shanghai have all slowed their pace of appreciation, according to the most recent Prime Global Cities Index from brokerage Knight Frank.In Guangzhou, prices grew by an annual rate of more than 35% in the first quarter of 2017, but growth cooled considerably later, to around 16%, in the first quarter of 2018.

Residential price growth has also slowed considerably in Shanghai and Beijing, which logged a modest 5% increase in prices between the first quarter of 2017 and the first quarter of 2018, according to Knight Frank.

However, oversupply is likely to persist, especially considering that the primary buyer population—people ages 25 to 44—is shrinking, according to UBS. There are an estimated 50 ghost cities that exist in China, mainly in the northern parts due to overconstruction.

Two years ago, the Chinese government had began introducing cooling measures, including tightened lending rules, but that is unlikely to stem the flood of new product coming online, according to UBS. Given those conditions, the bank now warns against speculative buying and selling in the Chinese housing market.

“Capital gains expectations are too high and will ultimately turn negative, at least in real terms,” said UBS in the report.

Rather than attempt to sell units for a profit and risk loss, investors in China should focus on its underdeveloped rental market. While rental yields only remain around 1-2%, they provide real estate opportunity that “has further to evolve” according to UBS.

-GBO Correspondent.

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