British house prices saw their biggest one-month jump in a year and a half in January, Nationwide building society said today.
The mortgage lender said the average price of a home rose 1.4 per cent to £158,478, putting the year-on-year rise at 4.4 per cent, its fastest since last May.
The strength of the rise took analysts by surprise and further dented expectations that policymakers will soon cut interest rates by another quarter point from 4.5 per cent after a similar move in August last year.
British interest rate futures retreated a bit after the figures were released, indicating slightly reduced odds that the Bank of England will cut interest rates again in coming months.
Nationwide group economist Fionnuala Earley said the price rise was significant and "confirms the strengthening trend we have seen since October".
The 1.4 per cent jump was the strongest since July 2004, when house price inflation was running at more than 20 per cent.
January was the seventh month of rises on the Nationwide's widely respected measure and followed signs that property market activity is set to accelerate further.