British consumer credit continued to grow during October at rates not seen since 2006, while mortgage approvals edged up, Bank of England data showed on Monday.
While lending to consumers rose slightly less than forecast by 1.178 billion pounds last month, consumer credit was 8.2 percent higher compared with October last year — a rate of growth that matched September’s 9-1/2-year high.
Mortgage approvals for house purchases numbered 69,630 in October, up from 69,012 in September. Analysts in a Reuters poll had forecast 70,000 mortgage approvals were made last month.
The value of mortgage lending rose by 3.629 billion pounds from 3.562 billion in September, marking the biggest increase since April 2008 and outstripping forecasts for a 3.45 billion pound rise.
The figures suggest Britain’s housing market is starting to accelerate again after a dip last year when tighter rules on mortgage lending took effect.
Earlier this month, the Bank of England’s chief economist Andy Haldane said consumer credit was expanding at “a rate of knots”, although Deputy Governor Ben Broadbent has said Britain’s economic recovery is not a debt-fuelled boom.
Mortgage approvals have risen in most months this year and the pace of price rises has generally picked up.
The Bank of England has signalled that it may move as soon as Tuesday to introduce new, higher capital requirements for banks after a two-year recovery in Britain’s economy, but the changes are unlikely to have a big, immediate impact on lending.
In September, the BoE’s Financial Policy Committee said it expected house price inflation to pick up in the coming months and would be closely monitoring Britain’s so-called buy-to-let market, dominated by small landlords.
Finance minister George Osborne last week announced plans to increase tax on buy-to-let and second homes to ease demand for those squeezed out by house price rises, but some analysts warned that investors will instead pass the cost on in higher rents.