**MNI: 5 Things We Learned From BOE Money and Credit

By Jamie Satchithanantham and David Robinson

     **LONDON (MNI) - The following are the key points from the December money

and credit data release published Tuesday by the Bank of England:

     - The housing market remains lacklustre. House purchase approvals, a

leading indicator of future housing market activity, fell for the fourth time in

the last six months, down to 61,039 from 64,712 in November. This was the lowest

number of approvals since January 2015 and below the previous 6m average of

66,194.

     - While the change in unsecured consumer credit growth was a four-month

high in December (stg1.520bn), it was in line with the average level set across

2017. This result meant the annual growth rate edged up to 9.5% in December.

     - Mortgage interest rates paid by borrowers headed higher in December. The

2.55% average rate on the stock of secured loans, up from 2.50% in November, was

the highest since July 2017. The 2.02% average rate on new mortgages, up from

1.99%, was the highest since June last year.

     - The BOE data do not make it crystal clear, however, that mortgage

interest rates are trending upwards. Quoted, or 'shop window', mortgage rates

were patchy with rates on the two year 75% loan-to-value dipping, but nudging up

on 3 year 75% LTV and on a five year 75% LTV.

     Caution is needed in translating quoted rates into new mortgage rates. The

quoted rates take two or three months to feed through into new business and as

they are based on the lowest offers from lenders it is unclear how much business

will be carried out at these levels.

     - The full set of BOE data chime with the picture of a subdued housing

market that is likely to generate low, if any, house price inflation. Volumes of

big ticket retail sales items, such as fridges and carpets, are driven in part

by the volume of housing transactions, and a decline in approvals points to

downward pressure on sales of these item.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI London Bureau; +44 203-586-2226; email: jamie.satchithanantham@marketnews.com

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