Bank of England figures released yesterday showed that mortgage approvals were down in April to levels lower than expected, but credit card lending was up, pushing consumer lending up more than forecast.
The new results are likely to fuel fears that house prices will continue drifting lower in the next year, and experts are putting the increased credit card spending down to the bank holidays as a result of the Easter break and the royal wedding, with retail sales already up as a result of the seasonal period.
Mortgage approvals for house purchases were down from 47,175 in March to 45,166 in April, and were well below forecast. The figures are also the lowest since December last year.
In contrast, unsecured consumer lending increased twice as much as forecast, as experts failed to predict the effect of the royal wedding and Easter holiday. Consumer lending was up to £504 million, £250million more than predicted, and fuelled by a £347million increase in consumer credit card lending. This was also the largest increase in credit card lending since February 2010.
Also released were figures that showed that M4 money supply was down at it’s lowest annual rate since October last year, while M4 excluding intermediate other financial corporations was down just 0.1% for the month.