UK Lending Surges to Fastest Since 2018 Before Rate Call
British consumers borrowed at the fastest pace since 2018 last month, Bank of England figures showed, on the eve of a knife-edge decision on interest rates. Mortgage approvals also beat forecasts, even as lenders including Santander and Halifax raised their rates ahead of Thursday’s announcement. The Bank is still expected to hold Bank Rate at 3.75 per cent.
The lending data complicate the picture for policymakers, suggesting household demand remains resilient just as the oil-price spike from the Iran war revives fears about inflation. Gilt yields rose to around 5.04 per cent, their highest in months, as investors bet on a more hawkish Bank, and analysts said a rate cut looked distant. For borrowers, the message is that cheaper money remains some way off. The decision comes at noon on Thursday. Watch the Bank’s language on the energy shock for clues to its next move.