British house prices jumped at their sharpest pace in five months in January and consumer confidence rose more than expected, in a sign the economy got off to a good start in the new year. The Nation-wide building society said house prices rose by 1.2 percent this month, more than twice the 0.5 percent gain seen in December and the biggest advance since August.
Analysts had forecast a 0.3 percent rise on the month. That took annual house price inflation to 8.6 percent from 5.9 percent last month, the highest since October 2007 and following double-digit declines in many months last year. And GfK NOP's consumer confidence index rose 2 points to -17 this month to stand 20 points higher than the same month last year, with 3 out of 5 components higher than December.
Despite this week's data showing the economy grew just 0.1 percent in the last three months of 2009 after an 18-month long recession that wiped out 6 percent of output, consumers are somewhat more upbeat, the GfK survey showed. The housing market has picked up again in recent months thanks to the Bank of England cutting interest rates to a record low of 0.5 percent and pumping nearly 200 billion pounds ($325.4 billion) of newly-created money into the economy by buying mostly government bonds.
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