British consumer credit surges, mortgage approvals edge higher

British consumer credit continued to grow during October at rates not seen since 2006, while mortgage approvals edged up, Bank of England data showed yesterday.

While lending to consumers rose slightly less than forecast by £1.178 billion (€1.671bn) last month, consumer credit was 8.2% 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 month.

The value of mortgage lending rose by £3.629bn from £3.562bn in September, marking the biggest increase since April 2008.

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 this year and the pace of price rises has generally picked up.

The Bank of England has signalled it may move today to introduce new, higher capital requirements for banks, but the changes are unlikely to have an immediate impact on lending.

* Reuters