The FINANCIAL — Mortgage lending in the U.K. rose in October to its highest monthly total in seven years, Bank of England data showed Monday, an increase that may add to concerns over the quickening pace of credit growth, according to Nasdaq.
Lending to home buyers was £ 3.6 billion ($5.4 billion) in October, net of repayments, the largest monthly total since April 2008, the BOE said. Gross lending was £ 20.1 billion, the highest since June 2008, compared with lending of £ 18.6 billion in September.
The pickup in mortgage lending suggests the housing market will continue to help fuel growth this year. But it may also reignite concerns among central bank officials that some Britons are at risk of taking on debts they may struggle to afford when interest rates rise.
Worries over indebtedness prompted BOE officials last year to clamp down on the amount of lending to home buyers borrowing more than 4½ times their annual income.
The BOE’s Financial Policy Committee, which deals with risks to the stability of the financial system, will on December 1 announce its latest policy decisions and some analysts think it may seek to restrain further acceleration in credit growth by nudging up bank capital requirements.
BOE data on October 30 showed unsecured borrowing by consumers rose by a net £ 1.2 billion in October, compared with a rise of £ 1.3 billion a month earlier.
Business lending also rose after months of weakness. Lending to nonfinancial firms increased by a net £ 2.3 billion in October, after shrinking by £ 900 million in September.
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