British house price inflation jumped to its highest rate for 2 1/2 years in July, the Halifax says today. Its monthly house price index rose by a seasonally adjusted 2.2 per cent last month, to give an annual increase of 8.2 per cent, up from 6.6 per cent in June and its highest level since December 1996. The country's largest mortgage lender said the housing market recovery in Britain would continue over the remainder of the year, but added it did not expect a return to the boom conditions of the late 1980s.

"The sharp turnaround in the housing market since the spring was maintained in July as the historically low level of mortgage rates and the marked improvement in the economic climate continued to provide a boost to the market," said Halifax.