UPDATE 2-UK house prices fall in June, outlook uncertain

* Halifax house prices fell 0.5 pct m/m in June

* Annual pace of decline slowest in 11 months

* Mortgage lender warns property outlook remains volatile

* BRC shop prices and KPMG/REC jobs data give mixed message

By Fiona Shaikh

LONDON, July 8 (Reuters) - British house prices fell less than expected in June and at their slowest annual rate in 11 months, the latest Halifax survey showed on Wednesday, but the mortgage lender cautioned prices would stay volatile this year.

Halifax said house prices fell 0.5 percent in June for an annual rate decline of 12.5 percent -- the slowest since last July -- and it said there were signs the market was stabilising.

Still, June's fall reversed a 2.6 percent rise in May and contrasted with figures from rival mortgage lender Nationwide last week, which said house prices rose 0.9 percent last month.

Analysts were sceptical whether the downward trend in house prices was over.

"The Halifax data reinforce our doubts that house prices have bottomed out, and we certainly do not think that we are now at the start of a renewed sharp upward trend," said Howard Archer, economist at IHS Global Insight.

Coming after other data showing the jobs market decline slowed and shop price inflation continued to ease last month, the figures highlighted the degree of uncertainty on where the economy is heading after suffering its deepest fall in 50 years.

Bank of England policymakers have seemed unconvinced by recent surveys that suggested growth had already resumed, and their scepticism was borne out by unexpectedly weak industrial output data earlier this week.

They are almost certain to hold interest rates at a record low of 0.5 percent when their two-day policy meeting ends on Thursday and many analysts reckon they will increase their 125 billion pound quantitative easing scheme to 150 billion pounds.

"Perhaps we were all a little bit too upbeat about expecting growth to return quickly," said George Buckley, chief UK economist at Deutsche Bank.

"There's no doubt we're slowly coming out of recession, but we might not see particularly strong growth on the other side."

HOPES FOR UPTURN

Britain's embattled Labour government, meanwhile, is hoping that things will pick up in time for an election expected by next May, and Prime Minister Gordon Brown has called on world leaders to focus on tackling the global economic downturn.

"We have to deal with the challenge of resuming growth in the world economy," Brown told Reuters in an interview ahead of the G8 summit in Italy. [ID:nL7699172]

And some of Wednesday's data provided a glimmer of hope of a let-up in the pace of the downturn.

A survey by KPMG/REC overnight showed the market for permanent jobs contracted at its slowest rate in more than a year in June, while that for temporary staff also weakened at a slower pace. [ID:nL7352212]

And a monthly survey by mortgage lender Nationwide showed consumers were their most upbeat in 8 months in June due to growing confidence the economy will pick up.

Halifax said house prices in the three months to June were down 15.0 percent compared with a year ago, the smallest decline since last November and leaving the average price of a home at 157,713 pounds ($255,300).

"Whilst there have been encouraging recent signs of improvement, the outlook for the UK economy remains uncertain with unemployment set to continue rising for some time," said Halifax economist Martin Ellis.

"Overall, we expect to see a continuing mixed pattern of monthly house prices and falls over the remainder of 2009." (Editing by Mike Peacock) ($1 = 0.6176 pounds)