LONDON (Reuters) - Unsecured lending rose in November 2005 by the smallest amount in almost five years while mortgage approvals climbed to a 1-1/2 year high, the Bank of England said on Wednesday. Consumer credit rose by just 927 million pounds in the month, the run-up to the crucial Christmas shopping season, after a rise of 1.210 billion in October and by much less than forecasts for a 1.3 billion pound increase. But mortgage lending rose by a much bigger than expected 8.687 billion pounds after a 7.702 billion pound rise the month before. Analysts had forecast an increase of 7.9 billion pounds.
Taken with another rise in loans for house purchase agreed but not yet made to 115,000, their highest since May 2004, the figures were evidence of more firming in the housing market after more than a year in the doldrums. Analysts said the figures were a mixed bag and did little to clarify where interest rates will go next from 4.5 percent. A majority are still predicting policymakers will trim borrowing costs this year to shore up household spending and growth.
"The consumer credit numbers were weaker than expected ... (but) we know that retail activity in the first part of December was pretty strong," said Mark Miller, economist at HBOS Treasury Services.
"The housing market is showing some modest signs of improvement," he added.
Short sterling rate futures briefly pared earlier gains after the data were released but were trading up a few ticks on the session. Policymakers have made clear they need to see more figures on the Christmas shopping season and the outcome of the new year wage round before passing judgment on where interest rates should go next.
© Reuters 2006. All Rights Reserved.
Taken with another rise in loans for house purchase agreed but not yet made to 115,000, their highest since May 2004, the figures were evidence of more firming in the housing market after more than a year in the doldrums. Analysts said the figures were a mixed bag and did little to clarify where interest rates will go next from 4.5 percent. A majority are still predicting policymakers will trim borrowing costs this year to shore up household spending and growth.
"The consumer credit numbers were weaker than expected ... (but) we know that retail activity in the first part of December was pretty strong," said Mark Miller, economist at HBOS Treasury Services.
"The housing market is showing some modest signs of improvement," he added.
Short sterling rate futures briefly pared earlier gains after the data were released but were trading up a few ticks on the session. Policymakers have made clear they need to see more figures on the Christmas shopping season and the outcome of the new year wage round before passing judgment on where interest rates should go next.
© Reuters 2006. All Rights Reserved.
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