Add the yeast and sugar into the lukewarm milk. Stir, cover and leave to rest for at least 10 minutes. At the surface of the milk some bubbles should appear. (see image). If the bubbles do not appear the milk might have been too hot.
Preheat your oven to the lowest setting. Mine is 50 degrees.
Now add the yeast to the flour, butter, egg, and salt and knead to a homogeneous dough for about 10 minutes. Place the dough into a bowl and cover with a tea towel. Turn off your oven and place the bowl into it. Leave to rise for about 40 minuites.
Now briefly knead the dough through again. Remove ¼ of the dough and set aside.
Form the remaining dough into a roll, about 45 cm (17.7 inches) long. Make your that the ends of the roll are tapered to a point.
Line a baking tray with baking parchment. As the pretzel is really large it might be easier to shape the pretzel directly on the tray.
To form new years pretzels take the roll and lay it in a "U" shape. In the middle take both and twist them around each other. The ends get pressed against the pretzel belly (the lower part of the pretzel).
Cover the pretzel with a tea towel and leave to rise for a further 10 minutes.
In the meantime, divide the remaing ¼ of the dough and divide into three equal parts. Roll each part into a long thin roll (about 30 cm). Then lay the three rolls into a braid.
Brush the lower part of the pretzel (the pretzel belly) with some water and lay the braid on top. Cover and leave to rest for a further 20 minutes.
In the meantime, preheat the oven to 190°C/ 374°F top to bottom heat. Mix the egg yolk with the 2 tablespoons of milk.
After the resting time brush the pretzel evenly with the egg yolk mixture. If you like you can sprinkle it with pearl sugar. Then place in the oven and bake for about 25-30 minutes. The exact baking time depends on your oven. To check whether the new years pretzel is done, pick the deepest part with a skewer. If it comes out clean it is done.
Serve the same day. Tastes delicious with butter, jam or chocolate spread.