British housing market stagnates

London - British consumer morale dipped for the first time in six months in July and house prices stagnated, adding to signs that Britain's rapid economic recovery is cooling slightly.

The consumer confidence index produced by market research company GfK unexpectedly fell although it was still close to a nearly 10-year high.

Monthly loss

House price growth figures from mortgage lender Nationwide were their weakest in more than a year.

The Bank of England and private economists expect Britain's economy to slow slightly in the second half of 2014, although it is still set to outpace all of its major European peers, raising questions about when interest rates will start to rise.

Sterling fell after the data and was on track to post its biggest monthly loss against the dollar in more than a year.

"With interest rate increases on the cards, and maybe a little bit of a slowing in growth, it's not a massive surprise (that consumer confidence dipped)," said Brian Hilliard, chief UK economist at Societe Generale.

Interest rates

"Consumer confidence is, however, at very high levels. This is just reminding us that it's around peak levels rather than it being weak."

The BoE is expected to leave interest rates on hold at a record low 0.5% when it meets next week.

"When you look at the data, the momentum in the economy is strong enough to continue to expect the (BoE) to gear up for tightening in the next few months," said Sam Hill, senior UK economist at RBC in London.