LONDON, March 30 (Reuters) - British lenders last month approved the most mortgages in three months and consumer credit grew at the fastest pace in nearly two years, Bank of England data showed on Monday ahead of a potential hit from higher borrowing costs caused by the Iran war.
The BoE said 62,584 new mortgages for house purchase were approved in February, up from 60,246 in January. Economists polled by Reuters had pointed to 61,250 approvals during the month.
The value of mortgage lending, which
lags behind approvals, rose by the biggest amount since September - up 4.840 billion pounds ($6.41 billion) in net terms in February following a rise of 4.2 billion pounds in January.
Net consumer borrowing rose by 1.935 billion pounds in February, more than the 1.6 billion-pound forecast in the Reuters poll of economists.
The increase was above January's 1.828 billion pound rise, taking the annual rate of consumer credit growth to 8.5%, its fastest since March 2024.
The annual growth rate of the M4 money supply excluding non-bank financial institutions - which some economists see as a factor driving medium-term inflation - increased to 3.9% in February from 3.6% in January.
But Paul Dales, chief UK economist at Capital Economics, said this still represented a relatively subdued growth rate ahead of the outbreak of the Iran war, suggesting "the burst of inflation triggered by higher energy prices is more likely to be short-lived than long-lasting".
House prices were also likely to rise less this year than the 3.5% increase which Capital had previously forecast, Dales said, pointing to a rise in two-year fixed rates for mortgages to 4.8% from 4.0% before the conflict.
($1 = 0.7556 pounds)
(Reporting by Suban Abdulla; editing by David Milliken)
