British recovery boosted by higher lending

Economists said that figures released Tuesday by the Bank of England (BOE) showing increased lending indicated a continued recovery of the British economy. The BOE reported mortgage approvals rose to a 66-month high of 66,735 in September from 63,396 in August, an increase of 33.8 percent year-on-year though still below the long-term average. In addition, figures showed lending to consumers rose by 411 million pounds (659 million U.S. dollars) in September, down from increases of 620 million pounds in August and a 2013-high of 683 million pounds in July. Lending to non-financial businesses was also up, by 720 million pounds (1.1 billion U.S. dollars) in September. Blerina Uruci, British economist with Barclays Economics Research, said, "Credit flows to the British household sector remained healthy in September." "Both secure and unsecured lending to households rose at a healthy pace last month, but net lending to businesses remained weak -- providing a now familiar split between credit flows to the two sectors," she added. Dr Howard Archer, chief UK and European economist with IHS Global Insight, warned of overheating in the home sales market. "There is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the 'Help to Buy' mortgage guarantee scheme which was launched earlier in October," he said. The BOE's mortgage figures showed house prices up for the ninth consecutive month in October, a 3 percent year-on-year gain and the fastest growth since 2007.