UK House Prices Tickle Up Amid Slowing Yearly Pace

UK house prices ticked up in July after three months of decline, but the yearly pace cooled. Nationwide Building Society reported that prices rose by 0.1% in July, marking the first monthly increase since April.

The year-on-year gain slowed to 1.8% from 2.2% in June, broadly matching economists' expectations. According to Robert Gardner, chief economist at Nationwide, this suggests stabilization rather than a strong demand for housing.

One reason for the slow pace is that mortgage rates don't only track the Bank of England's Bank Rate. Market interest rates, which are influenced by investors' views on future inflation, have risen in recent weeks due to concerns over rising US-Iran tensions and energy prices.

The Bank of England held its Bank Rate at 3.75%, but Governor Andrew Bailey noted that markets are pricing in a quarter-point increase this year, reflecting the risk of stickier-than-expected inflation.