(Bloomberg) -- Hi, I’m Leo from Bloomberg's UK Breaking News team, catching you up on this morning’s business stories. 

UK house prices rose unexpectedly for a third month, helped by a dip in borrowing costs that revived activity. That’s according to Nationwide’s closely-watched index. The average cost of a home edged 0.2% higher in November from the month earlier. Economists had expected a 0.4% drop. 

While buyers and sellers will naturally disagree over whether the housing market’s strength is good or bad, it’s definitely a sign of life in our economy. It also chimes with business leaders’ slightly less pessimistic view. More below. 

What’s your take? Ping me on X, LinkedIn or drop me an email at lkehnscherpe@bloomberg.net. 

Key Business News

Business bosses are growing slightly less pessimistic about the UK economy but overall sentiment “remains firmly entrenched in negative territory” despite big tax cuts announced last week, the Institute of Directors found. To put this into perspective: Confidence is now around 2019 levels — when leaving the European Union with no deal was on the cards — but better than the lowest points during the pandemic and the aftermath of Liz Truss’ mini-budget. Executives, unsurprisingly, said skills shortages remain among the biggest problems they face.

Rishi Sunak, meanwhile, will pledge to spend £1.6 billion on climate projects at the COP28 summit. The premier might want to show leaders the UK remains committed to the cause after he watered down his government’s green agenda and promised to boost oil and gas exploration.

Baillie Gifford’s UK Growth Trust, which invests in equities, lost money in the six months through October — and gave us with a good summary of FTSE trading this year. Some key findings from the stock picker were: 

  • Its investment in booze retailer Naked Wines was a “mistake” 
  • “Not owning either Shell or HSBC, which both performed well, also hurt” 
  • Overall, the fund manager said “short-term, cyclical concerns” overshadow the long-term prospects of its investments — even where operational and strategic progress remains in line or ahead of expectations

Finally, the government ordered investigations into the proposed acquisition of the Telegraph by a vehicle backed by Abu Dhabi’s Sheikh Mansour Bin Zayed Al Nahyan — the latest twist in the battle to control the famed conservative media brand. 

Markets Today’s Take

For all the doom and gloom on the UK’s housing market, surprises to the upside keep coming. Prices edging up once again in November, the third monthly increase in a row, is certainly better news, albeit that opinion will differ depending on whether you’re looking to buy or sell.

This has been driven in recent months by the substantial shift in interest-rate expectations in the market. Traders moving to bets on rate cuts by the BOE next year influences the swap rates that underpin mortgage pricing. Therefore, mortgages have become slightly more affordable in the past couple of months, helping to fuel this modest improvement.

That could well continue, but as Nationwide said this morning, hopes for a rapid recovery are “unlikely” to be fulfilled. Cost-of-living pressures are still weighing on households, consumer confidence is low and the BOE is set to remain in restrictive policy territory for a longer period. That may limit any big positive surprises, but it could mean that the market chugs along at a steady, if unspectacular clip until the first rate cuts come clearly into sight.

— Sam Unsted

For more news and analysis throughout the day, follow Bloomberg UK’s Markets Today blog. 

City Moves

Standard Chartered is in the early stages of a search for its next chair as the emerging markets-focused bank prepares for the departure of Jose Vinals. At Metro Bank, board members Anne Grim, Ian Henderson and Monique Melis are leaving without replacement. Nomura hired the Treasury’s former permanent secretary Tom Scholar to chair its European operations, according to the FT. And London-based crypto miner Argo Blockchain tapped former Citadel Technology chief Thomas Chippas as its new CEO. 

What’s Next? 

Next week will see updates from Lucky Strike maker British American Tobacco, construction firm Balfour Beatty, and Sports Direct-owner Frasers Group. The retailer will have to showcase its resilience to prove itself a worthy partner for the various rivals it has acquired stakes in. 

Buying a stake gets more-urgent attention than requesting a meeting, as Bloomberg Intelligence’s Charles Allen points out. Though there’s little sign that Frasers could really help the likes of Asos, Boohoo, or Currys. For now, Sports Direct remains Frasers’ key profit driver, Allen says.

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