House prices rose again in October but more slowly than expected and by less than in September. A 0.1 percent monthly rise in the Nationwide's index was a couple of ticks below the the market consensus and well down on the previous period's slightly weaker revised 0.6 percent advance. With base effects negative, annual inflation cooled from 3.2 percent to 2.4 percent and prices remain about 2 percent below their all-time highs recorded in summer 2022.

Even so, the 3-monthly change only dipped 0.1 percentage point and, at 0.6 percent, suggests that the market still has decent momentum. The labour market is strong, real earnings growth accelerating and mortgage approvals are approaching pre-pandemic levels. However, the forthcoming reduction to nil rate stamp duty threshold and higher stamp duty rate on second homes announced in the Budget may cloud the medium-term outlook while providing a boost to short-term activity.

More generally, today's update trims the UK's RPI to 14 and the RPI-P to minus 5. Overall economic activity is somewhat behind market forecasts and mainly due to surprisingly weak prices the ideal combination for a cut in Bank Rate next week.

Having surprised on the upside in September, prices are expected to ease to a 0.3 percent monthly gain, trimming the yearly inflation rate from 3.2 percent to 2.8 percent.

The Nationwide House Price Index (HPI) provides house price information derived from Nationwide lending data for properties at the post survey approval stage. Nationwide house prices are mix adjusted; that is, they track a representative house price over time rather than the simple average price.

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.

Although the Nationwide data are calculated similar to the Halifax method Nationwide substantially updated their system in 1993 following the publication of the 1991 census data. These improvements mean that Nationwide's system is more robust to lower sample sizes because it better identifies and tracks representative house prices. Historically, the data go back to 1952 on a quarterly basis and 1991 on a monthly basis.

Over long periods the Halifax and Nationwide series of house prices tend to follow similar patterns. This stems from both Nationwide and Halifax using similar statistical techniques to produce their prices. Nationwide's average price differs because the representative property tracked is different in make up to that of Halifax.