Mortgage lending leaps

30 March 2004
Mortgage lending rose at its fastest pace in a decade last month.

Bank of England figures show an increase in mortgage lending of £8.98 billion, equating to an annual rate of increase in secured lending of 14.5 per cent, the highest level since the start of records in 1994.

Many analysts agree that the mortgage lending figures could persuade the Bank of England's Monetary Policy Committee to increase interest rates in order to curtail consumer debt.

Philip Shaw, chief economist at investment firm Investec, said: "Consumers seem impervious to the two [interest] rate increases we have had so far. With personal borrowing near the top of the Bank of England's agenda, rates are likely to rise again."

Overall, February saw a £10.7 billion increase in personal borrowing, the biggest increase since October.

At the same time mortgage lending reached £25 billion unsecured lending through credit cards, loans, and overdrafts hit £18 billion.