Mortgage approvals increased in October

New mortgage lending and house purchase approvals increased slightly as mortgage lending continued to grow from the low levels at the end of 2008, according to the British Bankers’ Association (BBA). In contrast, consumer credit continued to be weak and lending to non-financial corporates fell.

BBA statistics director, David Dooks, said of the latest data: "The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution. The banks' mortgage lending, still growing by more than 4% a year, shows one aspect of consumer behaviour but unsecured borrowing is subdued and people are building up deposits.

"A mixture of lower business demand, alternative corporate funding and tighter lending conditions, all giving rise to the on-going contraction in lending to non-financial companies, is a reflection of current market conditions."