UK mortgage approvals highest in over 5 years, business lending up
LONDON Aug 30 (Reuters) - Lending to home-buyers hit its highest level in more than five years last month and lending to businesses rose for the first time since January.
The Bank of England data on Friday provided further evidence that Britain's economic recovery was picking up pace, helped by state incentives to free up credit.
Mortgage approvals for house purchase - a lead indicator of property demand - jumped to 60,624 last month from 58,238 in June - above forecasts for a reading of 59,000 but still well below monthly totals of 90,000 typically seen in the years leading up to the 2008 financial crisis.
Mortgage approvals and property transactions have been slower to recover from the crisis than house prices, which have jumped in recent months in response to record low mortgage rates and growing economic optimism.
A survey from the Royal Institution of Chartered Surveyors this month suggested prices were rising at their fastest pace since 2006.
In his first major policy speech since taking office, BoE Governor Mark Carney said on Wednesday he was "acutely aware" of the risk of unsustainable house price growth but there were better tools than interest rates to dampen down such a threat.
Lending to firms rose by 0.5 billion pounds in July, its first increase since January.
The BoE's preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose by 0.3 percent on the month, taking the annual growth rate to 4.5 percent.
Carney may be hoping to see a pick-up in the pace of money supply growth after announcing a relaxation of commercial banks' liquidity reserve requirements on Wednesday, potentially releasing 90 billion pounds in private sector credit.