Mortgages on a high but new loans squeeze looms

Mortgage approvals have hit their highest level in almost two years, but economists warn lending will become stricter again this year as banks fear a second recession.

Bank of England data yesterday showed that 52,854 home loans were approved in November, the biggest number since December 2009, but IHS Global Insight economist Howard Archer said the figures masked the fact that housing market activity remains “very weak compared to long-term lows”.

Meanwhile, consumer lending data showed evidence of “stressed borrowing” in the run-up to Christmas. Although the amount borrowed on credit cards remained largely unchanged in November, other types of loans rose by £400 million.

l Official figures showed that the profitability of UK corporates acting outside of the financial services sphere hit a three-year peak during the third quarter of last year.