UK December mortgage approvals rise to highest since Jan 2012
Loan approvals for house purchase in Britain rose last month to their highest level since January 2012, and net mortgage lending rose by the biggest amount since April, Bank of England figures showed on Wednesday. The data suggests that the central bank’s Funding for Lending Scheme – which went into operation in August – may be starting to raise the outright amount of money being lent to home buyers. The central bank has been hoping that the FLS would boost the flow of credit to households and businesses and support an economy now perilously close to a “triple-dip” recession.
The Euro, however, was expected to extend gains against the dollar, with sentiment towards the currency lifted after upbeat German data last week and by signs that European banks may have turned a corner. The Euro hit its highest level in over a year on Wednesday and shares, oil and metals were also on the rise, as confidence in the global economic outlook strengthened ahead of European data and the U.S. Federal Reserve’s latest policy decision. European economic confidence data for January, ECB crisis loan repayments and Italy’s sale of five and 10-year bonds will absorb most of investors’ attention before then, as they look for further evidence of a pick-up in the region.
Meanwhile, strong U.S. housing data yesterday and China’s promising economic growth forecast for 2013 also supported the upbeat mood and raised expectations for robust demand for fuel and industrial commodities, underpinning oil prices and lifting copper.
On the FX markets, the Euro rose to a 13-month high against the US Dollar, lifted by an improving outlook for the Eurozone and expectations the US Fed will maintain its monetary policy stimulus for the foreseeable future. EUR/USD broke through the 1.35 level early this morning while GBP/USD recovered some of its recent losses hitting a high of 1.5772.
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