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Mortgage approvals up 9,000 in May

02 July 2007
The amount of mortgage approvals handed out during May, easily surpassed the estimate initially put in place by the Bank of England.

Although the bank had earlier forecast that 105,000 mortgage approvals would be given, the actual total for May was some 9,000 more with 114,000.

Approvals had been slipping until May and these findings could prove to be the catalyst needed for the Bank of England to once more raise the base rate in order to effectively cool the property market.

Despite the amount of approvals rising, mortgage lending increased by its lowest rate since February last year with the total standing at £8.7 billion.

With interest rates currently at 5.5 per cent and further increases likely, according to some experts, the Bank of England has been urged to express caution when deciding whether to raise rates again for the fifth time since August 2006.

chief economist at the Engineering Employers Federation Steve Radley stated: "We have supported the Bank all the way through the current cycle of increases. However, we now believe that there are indications that the medicine applied so far is beginning to take effect and the case for another rise is not made."

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