LONDON: 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 Nationwide 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.
That may provide some comfort to Prime Minister Gordon Brown whose Labour government is hoping for an economic recovery in time for an election expected in less than 100 days.
But so far opinion polls point to victory for the opposition Conservatives after 13 years of Labour rule. Figures released earlier this week, showing Britain only just scraped out of recession at the end of 2009, have cast doubt on the prospects of a significant turnaround before an expected May 6 election.
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.
It said respondents were feeling more confident about the economic situation over the next 12 months in January, with that measure rising four points to -2. The future personal finance index was up one point to +4.