The Times reported that banks handed out more money through loans and overdrafts in October 2015 than they had done in almost a decade. This news comes after rising house prices and increasing consumer confidence driving mortgage lending to a seven-year high, which is causing a new dilemma for Bank of England policy makers.
Mark Carney, Bank of England Governor recently warned on the level of household debt which chief economist, Andy Haldane, indicated that the central bank may have to intervene to quash demand. Haldane also said this week "Unsecured debt...by which I mean not so much credit card debt as personal loads...is picking up at a rate of knots. We've seen the cost of those loans fall very significantly over the course of the last year or two. That would be ultimately an issue that the financial policy committee might want to look at pretty closely, and I'm sure it will". Carney and Haldane's viewing came after sentiments were fuelled by news that gross mortgage lending jumped to £12.9bn in October - 26% increase from 2014 and the highest level since AUG 2008.
The mortgage data issued by the British Banking Association, whose chief economist Richard Woolhouse commented that housing market activity remained strong in October. Consumers are remaining confident and incomes are growing.