UK lending growth slows
Growth in the total amount of money owed by Britons slowed at the beginning of 2007, official data has revealed.According to the Bank of England, the increase in net lending to individuals was £10.6 billion in January, which compares with the £11.3 billion experienced in December.These figures brought the 12-month growth rate down 0.1 percentage points to 10.5 per cent.Similarly, the annualised consumer credit growth rate fell six per cent in the first month of this year.Despite the apparent slowdown, the number of mortgages and remortgages approved in January both increased.Economist Howard Archer of Global Insight contends however that following three 0.25 percentage point interest rate rises in the last half-year, the data suggests housing market activity "could be beginning to cool"."Specifically, mortgage approvals averaged 117,000 in January and December combined, compared with an average of 126,000 during September to November. Meanwhile, lending secured on dwellings moderated to £9.6 billion in January from £10.3 billion in December, although it was still in line with the average for the past six months," he elaborated."Housing data can be very volatile and we would still be wary about reading too much into the Bank of England mortgage approvals data at this stage. Nevertheless, there are tentative signs that the cumulative 75 basis points increase in interest rates enacted so far since last August could now be starting to weigh down on the housing market."
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