U.K. Mortgage Lending Rises Most Since Before Lehman CollapsedScott Hamilton
U.K. mortgage lending grew the most since April 2008, months before the collapse of Lehman Brothers Holdings Inc. sparked the global financial crisis.
Lending increased 3.9 billion pounds in November from the previous month, the Bank of England said on Monday. Gross lending of 20.3 billion pounds was the highest since June 2008.
The data showed other signs of a borrowing pickup, with net consumer credit growing 1.5 billion pounds, the most since February 2008. The 70,410 mortgage approvals in November exceeded economists’ forecast for an increase of 69,800.
Record-low interest rates are fuelling credit growth, with the average rate on secured loans to households dropping to 3.01 percent and on unsecured borrowing falling to 6.76 percent, both the lowest since records began in 1999. BOE policy makers have maintained benchmark borrowing costs at a record low while inflation hovers around zero.
A weak spot in the report was in business lending, with the amount extended to non-financial companies dropping 878 million pounds. The amount for large companies declined 934 million pounds while the reading for small- and medium-sized companies rose just 57 million pounds.
M4, a broad measure of money supply, grew 0.4 percent from the previous month and was up 0.5 percent from a year earlier. The BOE also said overseas investors purchased 12.9 billion pounds of gilts in November.