House prices again held up rather better than expected in February. A 1.1 percent monthly rise was well above the market consensus and followed an upwardly revised 0.2 percent increase in January. The latest two gains ended an unbroken run of declines from last September through December and left the annual inflation rate flat at 2.1 percent.

The quarterly change, the best guide to underlying developments, now stands at minus 2.5 percent, still indicating a weakening trend but up from minus 3.5 percent in the three months to January. Recent falls in mortgage rates, improved consumer confidence and a still tight labour market provided some boost to demand last month and supply remains supportive. Even so, the near-term outlook remains soft.

However, more generally, today's update puts the UK ECDI at 29 and the ECDI-P at a solid 35. Both measures show that overall UK economic activity is performing more robustly than market expectations.

Prices are seen dipping a monthly 0.3 percent having been stable in January.

The Halifax House Price Index (HPI) is the UK's longest running monthly house price measure with data covering the whole country going back to January 1983. The index is based on the largest monthly sample of mortgage data, typically covering around 15,000 house purchases per month, and covers the whole calendar month. In March 2016 Markit announced that it would be acquiring the Halifax HPI from Lloyds Banking Group. Halifax continues to publish the index on behalf of Markit and both the name and the basic methodology remain unchanged. However, in May 2020, the annual growth measure was changed from the average of the last three months to just the latest month.

Home values affect much in the economy - especially the housing and consumer sectors. Periods of rising home values encourage new construction while periods of soft home prices can damp housing starts. Changes in home values play key roles in consumer spending and in consumer financial health. During the first half of this decade sharply rising home prices boosted how much home equity households held. In turn, this increased consumers' ability to spend, based on wealth effects and from being able to draw upon expanding home equity lines of credit.