Pressure remained on the Bank of England (BoE) to raise interest rates as a key survey yesterday showed UK house prices rising at their fastest annual pace in over a year, although there were also signs of cooling.
Most analysts expect the bank to announce a rate rise today, probably of 0.25 of a percentage point.
Britain's largest mortgage lender, Halifax, said house prices rose 1.3 percent in July compared with a rise of 1.2 percent in June. Prices were 22.1 percent higher in the latest three months compared with a year ago, the fastest annual rate in over a year.
However, the monthly rise remained well below the average monthly increase of over 2 percent during the preceding six months.
The data is unlikely to deter the BoE, which began a two-day rate-setting meeting yesterday, from hiking interest rates today as expected.
The Bank may be relieved the Halifax figures do not confirm the rapid acceleration in house prices reported by the Nationwide Building Society in July. Nationwide said prices rose 2.1 percent in July.
Economists expect the BoE, which has recently become increasingly vocal about the risks that unsustainable house price inflation poses to the economy, will raise interest rates 0.25 of a percentage point basis point to 4.75 percent on Thursday.
That would be the fifth quarter-point rise since November.
