Hopes of lower British base rates and a further early cut in the German 'repo' rate saw the June short sterling future rise from 94.9 to 94.94, almost fully pricing in a quarter- point cut in base rates to 5 per cent.
Consumers borrowed a net pounds 235m in new credit in January, sharply down on December's pounds 425m and the lowest since August, according to the Central Statistical Office. The main reason was a sharp drop in hire-purchase lending by finance houses, which economists said was at odds with buoyant sales of cars and household goods.
Net new finance house lending fell from pounds 384m in December to pounds 255m in January, the lowest for six months. Some pounds 6m of debt on bank credit cards was paid off following net borrowing totalling pounds 74m in the previous two months. The total amount of consumer credit outstanding rose from pounds 31.65bn in December to pounds 31.81bn in January, with just over pounds 70m of bad debt written off.
Jonathan Loynes, of Midland Global Markets, said the fall in consumer borrowing might suggest that the official retail sales figures understated high-street spending in December and overstated it in January. Net new consumer credit in the three months to January totalled pounds 980m, barely down on the previous three, suggesting a flat trend.
Separate figures from the Department of the Environment showed a rise in the number of new houses started in January to 15,400 from 13,900 in the previous month after adjusting for seasonal factors.Reuse content