-Richard Woolhouse, Chief Economist at the BBA
The number of mortgages approved by British banks picked up in January following six-month streak of declines, but remained markedly lower compared with the same period last year. According to the British Bankers' Association, mortgage approvals for house purchases increased to 36,394 in the reported month, up from 35,816 in December. Although the gauge rose, it was still down 26% from January 2014. Moreover, BBA reported that improved household finances and increased availability of credit spurred demand for personal loans at the beginning of the year. Personal loans rose 3.9% on an annual basis, the highest rate since 2008. Meanwhile, the latest data from the Bank of England revealed that the number of mortgage approvals had surged to 60,275 in December, up from a revised 58,956 in the preceding month. The volume of credit for house purchases also rose by 1.6 billion pounds, slightly below the six-month average.
The second estimate of UK GDP is due later today. The first estimate showed the British economy grew 0.5% in the December quarter of last year, down from 0.7% in the preceding three-month period. The first estimate was based on around 50% of the data available, and included information only on the output side of GDP. Analysts' expectations for the second estimate of GDP stand for no change to the headline quarterly reading.
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