Mortgage approvals climb in May

The number of mortgage loans approved but not yet made rose slightly in May, the Bank of England (BoE) has said.

In total, May saw 114,000 mortgage approvals, up from 109,000 in April.

Meanwhile, mortgage lending rose by £8.7bn, its slowest rate of increase since February 2006 and a little below analysts" forecasts.

The Nationwide said that UK house prices are increasing at a faster than expected pace, boosting the chances of UK interest rate rise.

The BoE"s Monetary Policy Committee meets next week to decide the next move in UK rates.

Many analysts expect that the Committee will vote to raise interest rates from their current level of 5.5%.

UK interest rates have risen four times since last August.
Nevertheless, it seems that the housing market and consumer credit is continuing to grow.

The BoE said that consumer credit, including credit cards and personal loans, rose by £842m in May, compared to an increase of £500m in April.

30 June 2007

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