UK December mortgage approvals hit highest since January 2008
LONDON (Reuters) - British lenders approved the highest number of mortgages in nearly six years in December but another fall in business lending underscored the challenge for the economy in 2014, Bank of England data showed on Thursday.
Britain's economy enjoyed a strong finish to 2013, growing 0.7 percent from October through December, rounding off its best year of growth since 2007.
But the recovery has been largely driven by housing and the consumer sector, and the Bank of England has warned that exports and business investment will need to strengthen in 2014 for growth to last.
Thursday's data underscored the revival in the housing market, with 71,638 mortgages approved in December, the highest since January 2008 and up from November's 70,820 - although that slightly undershot analysts' expectations for 73,000.
Data from mortgage lender Nationwide on Wednesday showed Britain's house price surge slowed in January after the biggest monthly jump in more than four years in December, although on an annual basis prices continue to rocket higher.
BoE Governor Mark Carney said earlier this month he expects the momentum in the housing market to continue through this year, before slowing around the middle of 2015.
Although housing market activity has picked up, mortgage approvals are still short of levels as high as 90,000 a month seen before the 2008 financial crisis.
Carney has stressed the recovery still has a way to run before the BoE will consider raising interest rates, and recent weak lending figures to businesses show why.
The BoE said that lending to non-financial businesses fell again in December, down 1.9 billion pounds after a steep 4.6 billion-pound fall in November. Lending to small businesses alone fell by 1.2 billion pounds.
Unsecured lending consumers rose by 0.6 billion pounds, slightly short of expectations.
The BoE's preferred gauge of money supply, M4 excluding intermediate other financial corporations, fell 0.1 percent on the month, taking the annual growth rate to 3.7 percent.
(Reporting by Andy Bruce and William Schomberg)
