U.K. consumer lending posted its strongest rise for 19 months in February, a sign that the Bank of England's efforts to tackle the devastating credit crunch may be gradually paying dividends, according to data released Monday by the central bank.
But the number of loans that were approved for home purchases slipped to the lowest level for nine months in February, an indication that the recovery in the residential property market is losing some momentum because of the fragile economic outlook and end of a tax break on some home purchases at the end of last year.
The BOE said net lending to individuals totaled $3.1 billion in February, up from a revised $2.8 billion in January and the largest figure for a single month since July 2008.
Net lending was also stronger than the market consensus estimate of $2.1 billion from a Dow Jones survey of economists last week. Nevertheless, net lending remains less than a quarter of the $13.2 billion in February 2008.
The BOE's Monetary Policy Committee has long highlighted the lack of bank lending as a major drag on the U.K.'s economic recovery. The BOE paused its quantitative-easing stimulus program of bond purchases at $300 billion in February.
The figures showed the number of loans that were approved for house purchases dipped to 47,094 from 48,099 in January — below economists' expectations of 48,500 and the lowest level since May of last year.
