Place the lukewarm milk, 1 tablespoon of the sugar, and the yeast in a medium sized bowl, and stir to combine. Leave for 10-15 minutes, until it becomes foamy.

In the bowl of a stand mixer with the dough hook attachment, place the rest of the sugar, flour, salt, and butter, and mix briefly to combine.

Add warm milk mixture and the warm water to flour mixture, and beat at medium speed until combined.

Beat at low speed with dough hook attachment until you have a soft and sticky dough, about 5 minutes. Turn out onto a lightly floured surface and shape into a smooth ball.

Place dough in a lightly oiled bowl, cover, and let it rise for 1 hour.

Divide the dough into 12 portions (81 grams each). Roll each portion into a 20 inch rope. Shape each rope into a U shape, twist the ends twice, fold down, and pinch to seal. Place on a parchment lined tray and cover, letting it rise for 20-30 minutes.

Preheat oven to 375°F/190°C. Line 2 trays with parchment paper.

Fill a large saucepan with water and bring to a boil. Add the baking soda.

Carefully drop the pretzels in, one at a time, for 40 seconds on each side. Use a strainer or spatula to take them out and place on the tray.

In a small bowl, whisk 1 egg yolk and 1 tablespoon of water together as your egg wash. Brush egg wash on dough.

Bake for 12-14 minutes, until golden brown. Let cool slightly, just 5 minutes.

In a large bowl, combine sugar and cinnamon.

Brush the melted butter on to pretzels. Place 1 pretzel at a time in cinnamon sugar bowl and toss.

Whip cream cheese and softened butter for 2 minutes with an electric whisk. Add powdered sugar, milk, and vanilla extract, mixing until combined.