Biggest surge in UK mortgage for six years

British mortgage approvals surged by the most in six years in April and lending to individuals also rose sharply, underlining the clout of the country’s consumers, but also its reliance on them to drive the economy.

Yesterday’s data from the Bank of England supported expectations that the pace of the broader economic recovery in Britain will pick up again by mid-year after slowing at the start of 2015, giving a nudge to a long-running debate about when interest rates might rise.

Mortgage approvals for house purchases hit their highest level in 14 months, reaching 68,076 from 61,945 in March.

The monthly rise was the biggest since February 2009 and stronger than forecast by economists, who had expected uncertainty about the outcome of Britain’s May 7 election.

The rise in consumer lending was not far off March’s seven-year record monthly jump.

The figures were a reminder of the lopsidedness of Britain’s recovery, with weak manufacturing and trade unlikely to contribute much to growth in the coming months.

Scotiabank economist Alan Clarke said they could also help to persuade some Bank of England policymakers to think about raising interest rates from their record low of 0.5%.

“I think the hawks should start to get twitchy imminently,” said Mr Clarke.

“You’ve got wages picking up just as the Bank of England pushed down its wage forecast, and there’s a good chance of a very good second-quarter GDP.”

A survey from Markit/ CIPS showed growth among UK housebuilders picked up last month — something that will be crucial to ensuring housing supply meets demand and keeping rising prices in check.

Mortgage approvals fell throughout most of 2014 as regulators introduced new controls on mortgage lending, cooling strong house price growth.

Still, in March, Bank of England governor Mark Carney described the housing market as the biggest medium-term risk to Britain’s financial stability.