Warm up the milk, then add the sugar, a tablespoon of flour and the yeast and mix well.
Set the mixture aside for 10 minutes, it will rise and become frothy.
In a large bowl, add the flour, salt, yeast mixture, water, oil and knead for 5 minutes -add more flour if necessary to have a dough does not stick to the hands.
Cover the bowl with a clean tea towel and leave to double up its size.
Transfer the dough to the working surface and shape into thin ropes.
Cut each rope into bite-sized pieces.
Preheat the oven to 180 degrees Celsius, (350 Fahrenheit).
Slightly beat the egg and brush each pretzel with it, then sprinkle caraway seeds over.
Bake in the oven for 15 minutes or until golden.
Allow to cool for at least 5 minutes, then serve either warm or cold.