While the housing market showed more signs of life in April than at any time since last summer, signs of UK consumer credit was much weaker than expected in April, shoppers using unsecured consumer credit were drawing in their horns.
This unusual conflicting trend was revealed yesterday in numbers from the Bank of England showing mortgage lending of £7.3 billion - after allowing for repayments - more than in any month since last September, coupled with the approval of £24.9 billion of new mortgages to be paid out later. This was the highest total since last June, before the housing market began to slow down.
Against that, net new consumer credit rose by just £1.3 billion, down from a rise of £1.8 billion in March, the smallest monthly increase since December, 2003, and almost £1 billion short of January ' s peak of £2.353 billion.
The moderation in consumer credit reflects a sharp slowdown in credit card lending during the month. This eased substantially to rose by just £316 million, the lowest monthly rise since June, 2001 and down from one of £715 million in March.
The British Bankers' Association, speaking for the big British banks, has reported the first monthly fall in credit card debt owed to its members for more than a decade. Holders of cards issued by the banks repaid £40 million more than the borrowed in April.
At the same time, the number of home-buyers looking for a mortgage rose in April, as well as the total sum of money promised by banks and building societies. Some 95,000 mortgages were approved for house purchase, up from 92,000 in March.
This unexpected revival in activity in the housing market is not expected to influence the Bank of England's interest-setting monetary policy committee. It will be a great surprise if it changes its official interest rate this month from the 4.75 per cent where it has been since last August.
Yesterday, the Bank also reported that total net lending, combining net consumer credit and net mortgage lending, rose by £8.6 billion in April, down from £8.8 billion in March.