BoE: Britons' borrowing increases in November

Lending to individuals rose again in November, up £10.9 billion since October 2006, Bank of England figures out today reveal.

In November, mortgage lending increased by £9.8 billion, up 0.9 per cent on the previous month, with the number of mortgage approvals also up from 128,000 to 129,000.

Consumer credit, such as credit cards, personal loans and overdrafts, was also up by £0.2 billion in November on the previous month, though the rate of increase has slowed slightly since October.

"This is a very strong set of mortgage data. Mortgage approvals amounted to a near three-year high of 129,000 in November, while lending secured on dwellings amounted to a three-year high of £9.8 billion," commented Howard Archer of financial consultancy Global Insight.

Mr Archer added the figures show August's interest rate rise had little immediate effect on the housing market, though it was too early to see the effect of November's further increase in base rate.

Commenting on unsecured lending, Mr Archer said levels of borrowing "eased back" as a result of consumers finding less expensive ways to finance their spending and switching to secured borrowing.

"Elevated debt levels, higher interest rates, rising unemployment and increasing pension concerns mean that there is an increased need for many consumers to try and improve their finances," he explained.

Mr Archer added: "The Bank of England does not currently regard debt levels as a major threat to the economy, despite recent rising individual insolvency levels and mortgage repossessions.

"This is probably true, assuming that interest rates do not rise markedly further over the coming months and that not too many people overstretch themselves in trying to buy a house."