The growth of narrow money supply, M0, slowed slightly to 6.8 per cent in the year to June but was still well above the Treasury's 0-4 per cent target range. The annual expansion rate in June compares with 6.9 per cent in May. But in June alone M0 grew by 0.5 per cent and, in the latest three months, M0 surged by an annualised 8.1 per cent.
The latest narrow money supply growth figures suggest that high street spending remains robust.
Additional Bank of England figures showed that fears of a relapse in the housing market may be overdone. Mortgage approvals by banks and building societies climbed to pounds 4.723bn in May from pounds 4.617bn in April. Gross lending rose to pounds 4.814bn from pounds 4.567bn, but net lending, after repayments, eased pounds 162m to pounds 1.510bn.
The fall in net lending to consumers, which excludes lending for mortgages, came after a pounds 104m repayment of credit card credit, taking account of a record pounds 3.064bn lent on cards during the month. The figures suggest consumers are using credit cards as an equivalent to cash, but may be reluctant to accumulate new debt.