According to Halifax’s house price index, price growth soared by 1.4 per cent in July, rising from a upwardly revised 0.9 per cent in June and easily outperforming forecasts of a slide to 0.2 per cent.
This also saw the annual rate of price growth jump from 1.8 per cent to 3.3 per cent in July, the fastest pace of growth since the end of 2017, helping to bolster pound exchange rates.
Analysts suggest the jump is likely correlated with the improvement in household finances as pay growth begins to outpace inflation after nearly a year of falling wages.
However, putting a slight dampener on the pound this morning was the latest retail survey from the British Retail Consortium (BRC), which suggests that the recent heatwave has failed to spur spending.
The data reveals that while food and drink sales were strong in July, clothing and non-food sales remained weak.
with Paul Martin, UK head of retail at KPMG suggested that “perhaps it was just too hot to hit the High Street”.
At the same time the US dollar remains in a position of relative strength this morning as it continues to be buoyed by safe-haven demand amidst ongoing trade tensions between the US and China.
However, some analysts have suggested that the US dollar could begin to weaken if Donald Trump’s tariffs start to bite at home as well.
Shinichiro Kadota, senior FX and rates strategist at Barclays in Tokyo said: “If US economic growth starts to slow down because of tariffs or because past tax-cut effects are waning, then I think the economic performance could fade, which could also lead to fading dollar strength.”
Looking ahead, the pound US dollar exchange rate looks poised to fall back later this afternoon.
It could come following the publication of the latest US job openings figures, with another robust reading likely to bolster confidence in the US economy.
Meanwhile in the absence of any UK economic data, the pound is likely to remain hyper sensitive to Brexit headlines over the next couple of days, potentially leading to further losses if progress remains limited.