UK consumer credit growth hits fresh 11-year high - BoE

Reuters - British consumer borrowing picked up pace to grow at its fastest rate in more than 11 years in November, and the mortgage market retained solid momentum, Bank of England figures showed on Wednesday.

Consumer credit in November alone jumped by 1.926 billion pounds - well ahead of forecasts in a Reuters poll - to push the annual growth rate in borrowing of 10.8 percent, a rate not seen since October 2005.

The data confirm the picture given elsewhere that Britain is likely to have been one of the fastest-growing advanced economies last year, but shed little light on how well consumers will withstand an expected rise in prices in 2017.

 

Economists polled by Reuters expect economic growth to more than halve this year to a rate of 1.1 percent as inflation rises to close to 3 percent from less than 1 percent in 2016 due to the effect of sterling's sharp fall since June's Brexit vote.

Last month the BoE said some households were highly indebted and might struggle as unemployment rose, and separate national accounts data showed British households saved the lowest portion of their incomes since 2008 during the three months after the Brexit vote.

Wednesday's figures show that the number of mortgages for house purchase approved by lenders rose to an eight-month high of 67,505 from a slightly downwardly revised 67,371 in October - broadly in line with forecasts in a Reuters poll.

Less comprehensive data last week from the British Bankers' Association had shown a small fall in mortgage approvals.

The BoE forecast in November that mortgage approvals would slow to a monthly average of 65,000 over the next six months, and major lenders expect weaker house price growth.

Nationwide Building Society, Britain's second-biggest lender, sees prices rising by 2 percent this year, half 2016's rate.

Before the referendum, Britain's government warned that a vote to leave could reduce a projected rise in house prices by 10 percentage points.

Net mortgage lending, which lags approvals, rose 3.157 billion pounds in November, the BoE said, somewhat less than a forecast of 3.5 billion pounds in the Reuters poll.

(Reporting by David Milliken and Ritvik Carvalho)