-Andrew Haldane, BoE Chief Economist
British mortgage approvals unexpectedly dropped in May after rising in April to the highest level in more than a year. Approvals for house purchases decreased to 64,434 from a downwardly revised 67,580, according to the Bank of England. The number of approvals declined throughout most of 2014, easing house price growth and alleviating concerns about the housing market bubble. Net mortgage lending, gross loans less repayments, rose 2.098 billion pounds in May, the biggest increase since November, the BoE said, slightly more than a forecast of 2.05 billion pounds and compared with 1.7 billion pounds in April. The BoE said consumer credit grew by 1.0 billion pounds in May, down from 1.176 billion pounds in April. Economists had expected an increase of 1.1 billion pounds. Despite May's slowdown, consumer credit on a three-month annualised basis rose 8.5 percent, the highest since August 2005. Lending to non-financial businesses rose by 700 million pounds in May, the BOE said. The BoE also said total net lending to individuals increased by 3.1 billion pounds last month, below forecasts for 3.3 billion pounds and up from 2.9 billion pounds in April. Meanwhile, the M4 Money Supply rose by a seasonally adjusted 0.5% in May, in line with expectations and following an increase of 0.4% in April.
Meanwhile, the BoE chief economists Andrew Haldane argued that the base interest rate should be cut immediately for a period of around one year to push inflation back to target.
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