Slow M4 growth offers hope on cost of borrowing

Growth in M4, the broad money measure, slowed during January, prompting renewed hopes that the Monetary Policy Committee would hold fire on interest rates at next month's meeting. January's record public sector debt repayment was the key reason for the slowdown in M4, which rose by just 0.2 per cent last month, taking the annual growth rate down to 10.1 per cent.

The City also took heart from new Building Societies Association figures, which pointed to a slight slowdown in the housing market. Building society gross advances dropped by pounds 393m in January, although net advances increased slightly. Data from the British Bankers' Association, by contrast, painted a slightly more buoyant picture of the UK economy. Mortgage lending rose by pounds 743m in January, compared to a December rise of pounds 647m, and credit card lending rose very strongly, by pounds 292m.