The annual fall in house prices worsened last month as the Bank of England is expected to increase interest rates over the course of the year.

Prices had slumped 3.4pc annually in May, compared to a fall of 2.7pc in April, according to Nationwide.

Property prices edged down 0.1pc last month compared with April, with the average property now worth £260,736. 

5 things to start your day 

1) Tories demand Rishi Sunak scraps ‘morally wrong’ inheritance tax | The Telegraph launches campaign to abolish the death duty

2) Inside the fight for life at Britain’s ‘voice of business’ | Scandal-hit CBI is fighting for survival in the wake of allegations of sexual assault

3) Sunak to discuss AI pact with Biden amid ‘extinction risk’ warnings | Attitudes in the White House are split over fears regulation could weaken US competition

4) Britain braces for recession as higher rates squeeze mortgage holders | Persistent inflation to leave Britain as the only major economy to suffer negative growth across 2023

5) House sales plunge to lowest level since Covid viewing ban | Slump reflects sharp increase in mortgage rates since September’s mini-Budget

What happened overnight 

The House of Representatives has overwhelmingly voted to suspend the debt ceiling limit, averting a catastrophic default and allowing Joe Biden to breathe a sigh of relief.

The deal – hammered out by the US president and the Republican House Speaker Kevin McCarthy – will now move to the Senate, where it is virtually certain to be approved.

Asian benchmarks were mostly higher after the approval of the debt ceiling and budget cuts package, avoiding a default crisis.

But the enthusiasm was muted by worries about the Chinese economy after disappointing recent data on a recovery in the world’s second largest economy, and a key driver of regional growth.

Japan’s benchmark Nikkei 225 rose 0.3pc to 30,976.43. Australia’s S&P/ASX 200 gained 0.3pc to 7,109.40. 

South Korea’s Kospi quickly lost early gains to dip 0.4pc to 2,567.86. Hong Kong’s Hang Seng jumped 0.8% to 18,381.63, while the Shanghai Composite added 0.4pc to 3,216.86.

Wall Street stocks retreated Wednesday as markets awaited the congressional vote. The Dow Jones Industrial Average finished down 0.4pc at 34,908.27.

The broad-based S&P 500 shed 0.6pc to 4,179.83, while the tech-rich Nasdaq Composite Index also dropped 0.6pc to 12,935.29.