Add the yeast and sugar to the lukewarm milk. Stir, cover, and let rest for at least 10 minutes. Bubbles should appear on the surface of the milk (see image). If bubbles don't appear, the milk may have been too hot.
Preheat your oven to the lowest setting (mine is 50°C/122°F)
Add the yeast mixture to the flour, butter, egg, and salt. Knead for about 10 minutes until you have a smooth, homogeneous dough. Place the dough in a bowl and cover with a tea towel. Turn off your oven and place the bowl inside. Let rise for about 40 minutes.
⅓ cup butter, 4 cups flour, 1 egg, 1 pinch salt
Now briefly knead the dough through again. Remove ¼ of the dough and set aside.
Shape the remaining dough into a roll about 18 inches / 45 cm long. Make sure the ends taper to a point.
Line a baking tray with parchment paper. Since the pretzel is quite large, it's easier to shape it directly on the tray.
To form the New Year's pretzel, lay the dough in a "U" shape. Take both ends and twist them around each other in the middle, then press the ends against the pretzel belly (the lower curved part).
Cover the pretzel with a tea towel and let rise for another 10 minutes.
Meanwhile, divide the reserved ¼ of dough into three equal parts. Roll each into a long, thin rope (about 30 cm). Braid the three ropes together.
Brush the pretzel belly with water and lay the braid on top. Cover and let rest for another 20 minutes.
Preheat the oven to 190°C/374°F (conventional heat). Mix the egg yolk with 2 tablespoons of milk.
1 egg yolk, 2 tablespoon milk
Brush the pretzel evenly with the egg wash. If desired, sprinkle with pearl sugar. Bake for 25-30 minutes. The exact time depends on your oven. To check for doneness, insert a skewer into the thickest part—if it comes out clean, the pretzel is ready.
Serve the same day. Delicious with butter, jam, or chocolate spread!
Notes
Recipe Variations
Instead of making one giant pretzel, you can use the same dough to form 8 individual pretzels from the same dough. Just weigh the dough and divide them into 8 equal portions.
Decorate the pretzel with slivered almonds instead of pearl sugar.
Make-Ahead
If you want to enjoy this new years bread for breakfast, but don't want to get up early to make the dough, you can leave it to rise in the fridge overnight. This will slow down the rising process.
Storage Instructions
The pretzel tastes best on the day it is baked. It will stay good for up to three days if you store it in an airtight container.