Bank of England: Interest rates rise likely after mortgage lending leaps

08 January 2007
British mortgage lending rose by £9.83 billion in November, the biggest leap since September 2003, new Bank of England figures show.

November also saw the highest number of mortgage approvals since December 2003 (129,000 in total).

Many commentators now expect to see a further rate hike in February at the very least to quash inflation in the housing market.

"We would expect to see housing featuring more prominently in MPC minutes and reports in the coming months," predicted Daragh Maher, a strategist at Calyon investment bank.

Geoffrey Dick, UK economist at the Royal Bank of Scotland, commented: "For those of us who are still hoping that rates can stay on hold in February, this was not the report we wanted."

Other statistics for November gave more cause for optimism, however, with a fall in growth in unsecured lending from £1.1 billion in October to £1.04 billion in November suggesting that consumers may be starting to behave more cautiously.

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