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UK Consumer Credit Increases Sharply

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UK Consumer Credit Increases Sharply

The Bank of England (BoE) has just published a monthly update on a range of economic indicators relating to the UK’s money supply.

Consumer Credit in the month of March almost doubled from the previous month. Individuals in the UK borrowed £1.13Bn, significantly more than February’s figure of £0.58Bn and far exceeding an expected number of just £0.6Bn.

The Net Lending To Individuals figure also rose accordingly, coming in at £2.9Bn during the month of March compared to just £2.1Bn in February. Market consensus was for a number closer to £2.3Bn.

Despite the expansion in Consumer Credit during March, Mortgage Approvals fell slightly from the previous month. In total 67,135 new mortgages were granted in the month compared with a figure of 69,595 in February. Market expectations were for a rise in Mortgage Approvals to over 71,000.

Earlier this morning the Nationwide Housing Prices index showed a further increase in the value of UK residential property. Month on month the index increased 1.2%, this represents an increase over the previous month’s figure of 0.5%. Year on Year British house prices have risen 10.9%.

Overall the UK’s Money Supply contracted during the month of March, the Bank of England has just announced that M4 has shrunk by 2.3% month on month, this is a surprise following February’s 0.7% expansion and markets had been expecting a further expansion of about 0.9%. Year on year the M4 Money Supply measure is showing to be down 0.3% in March following a 0.9% rise in February.

Unrelated to money supply, Markit Economics also release a valuable statistic this morning. The Markit Manufacturing Purchasing Managers Index provided a further update to sentiment within the UK’s important industrial sector. Today’s reading showed a further increase to 57.3, up from 55.8 the previous month, markets had expected a slight fall in this number to 55.4.

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