Mortgage approvals unexpectedly jumped in December and consumer
credit surged ahead but business lending has slumped, the latest Bank of
England figures have shown.
Its figures revealed lenders made 70,837 loans for house purchases
over the month, up nearly 1% in November to the highest level since
August and confounding economists’ expectations of a decline.
The latest rise in loans, bolstered by record-low borrowing costs and
falling unemployment, follows another year of solid price growth.
London prices hit an all-time high of £514,097 last month, with the biggest increases in the suburbs.
Although Nationwide signaled a slowdown in January, the government
and Bo E have increasingly been looking at measures to curb potential
overheating in areas such as buy-to-let lending.
The latest evidence of the UK’s unbalanced shopping and houses-led
recovery showed unsecured credit card debt, personal loans and
overdrafts surging at the fastest annual rate since February 2006, up
8.6% on a year earlier.
Business lending painted a different story, however as credit fell
£3.7 billion in December, much worse than the average £300 million
decline seen over the previous six months.
Loans to small and medium-sized business also fell by £300 million.
There was brighter news for the UK’s manufacturers as they outshone
European counterparts in the latest snapshot of the sector’s performance
by financial data firm Mar kit.
The Chartered Institute of Procurement & Supply’s activity index,
where a score over 50 signals growth, hit a three-month high of 52.9
last month, up from 52.1 in December.
The improvement came despite China-inspired uncertainty and, until
recently, a much stronger pound, leaving the domestic market to spur
growth.
Cips chief executive David Noble said manufacturers have started the year “in a positive, if slightly reserved fashion”.
On the Continent, trading was weak with slowing growth among German,
Italian and Dutch firms and stagnation in France and Greece.
