Statistics that point to an interest rates rise...
House prices and mortgage lending rose strongly in the new year, according to figures that appeared to contradict the Bank of England's forecast for a slowdown in the property market.
House prices and mortgage lending rose strongly in the new year, according to figures that appeared to contradict the Bank of England's forecast for a slowdown in the property market.
The price of the average home rose 0.5 per cent last month, following a 0.4 per cent rise in January, Nationwide building society said.
Although the annual rate declined to 10.2 from 12.6 per cent, Nationwide said there was evidence that the worst of the downturn in the property market was over.
Alex Bannister, its chief economist, said that at the current pace, house prices could end the year 6 per cent higher, above the Nationwide forecast of 2 per cent.
Separately, loans for house purchase rose 3 per cent from December to a four-month high of £7.12bn in January, the Bank of England said.
Consumer credit - overdraft, card purchases and bank loans - surged by 46 per cent in January to a seven-month high of £2.29bn. However, the number of mortgage approvals, a pointer to house prices a couple of months down the line, fell to 79,000 - close to November's nine-year low of 76,000.
The strength of the prices and loans figures sent the pound to a week-high against the euro. Alan Castle, UK economist at Lehman Brothers, said: "The odds of a surprise rate hike next week have probably increased to around one in three."
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