UK house prices continue growth

The Halifax Building Society, Britain's biggest mortgage lender, said that the average cost of a property rose by 1.2% during October to £137,780 (€201,700), with prices now 16.7% higher than they were 12 months ago.

The group said the market was not slowing as quickly as it had expected at the beginning of the year, although it added that annual house price growth was well down on the 24.5% recorded this time last year.

The information makes it increasingly likely that the Bank of England's Monetary Policy Committee, which begins its two-day meeting today, will increase interest rates for the first time in nearly four years.

The Bank of England is expected to raise interest rates by 25 basis points from a 48-year low of 3.5% tomorrow in reaction to improving economic conditions and continued growth in consumer spending.

Halifax said any rise in interest rates would not have a dramatic effect on the housing market.