UK Mortgage Lending Surges Despite Rising Interest Rates

Mortgage lending in the UK has seen an unexpected surge despite rising interest rates, according to recent figures from the Bank of England. The central bank's money and credit report revealed that net borrowing of mortgage debt jumped to £7.7 billion in June, up from £3.3 billion in May.

The number of mortgage approvals for home purchases also increased to 58,200 last month, compared to 56,600 in May. This modest rise in mortgage approvals may indicate some economic stability following the Bank of England's decision to hold interest rates at 3.75%.

Nathan Emerson, chief executive at Propertymark, suggested that buyers responded positively to a period of relative economic stability. However, he noted that approvals remained below the average recorded over the previous six months, indicating that while confidence may be improving, activity has yet to fully recover.

Net borrowing of consumer credit increased to £1.8 billion in June from £1.7 billion in May, with credit card lending being a key driver of this rise. In contrast, other forms of consumer credit such as car loans and personal loans decreased.