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Gross lending hits £11.6bn in October

The Bank of England’s latest figures for lending to individuals show gross lending in October was £11.6bn up from £11.3bn in September.

The was against repayments of £11.1bn giving a net increase of £500m.

But experts are predicting that overall lending could be set for a bigger rise after approvals rocketed by 3,000, from 50,415 in September to 53,000 in October. By value rose from £7.4bn the previous month to £7.7bn in October.

The number of remortgage approvals increased fractionally from 28,588 in September to 29,358 but was static by value at £3.9bn.

And the number of approvals for other purposes decreased slightly from 15,957 in September to 14,981 in October and remained below the previous six-month average of 16,484.

Overall lending to individuals, which includes both unsecured and secured lending, fell by £300m in October, but this came after a massive £1.7bn increase in September.

Capital Economics economist Samuel Tombs says: “Total lending to individuals fell by a monthly £0.3bn, led by a decline in unsecured lending. That said, this represents only a small step back from September’s chunky £1.7bn rise, which was the largest for four years.

“What’s more, mortgage approvals for new house purchase rose from 50,400 in September to 53,000 – the highest level since August 2011. So overall lending might start to rise again soon.”

However Tombs says he expects the recovery in lending to remain sluggish.

He adds: “Even if the supply of credit continues to improve, we expect demand for it to remain weak as households continue to focus on reducing their debt

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