

BoE mortgage data above expectations
The Bank of England has released June's lending figures, with data beating expectations, but the market still seems to be losing momentum.
In June net lending to individuals rose £10.4 billion, beating May's growth and the six-month average.
Net lending on secured dwellings rose £9.6 billion with loans approved for house purchase holding stable at 114,000 and falls for loans on remortgaging (102,000) and other purposes (72,000).
Over the second quarter mortgage approvals stood at 337,000, down from 350,000 in the first quarter of 2007 and 368,000 in the fourth quarter of 2006.
Consumer credit held firm with a net increase of £0.9 billion, with credit card lending rising £200 million and loans and other advances up £700 million.
Commenting on the figures, Howard Archer, chief UK and European economist at Global Insight, said: "The Bank of England mortgage data are stronger than expected, but do not significantly alter the overall impression from the latest data and survey evidence that the housing market is gradually losing momentum as higher interest rates start to bite.
"Furthermore, the overall easing back in mortgage approvals in the second quarter occurred even before affordability pressures were magnified by July's interest rate hike by the Bank of England."
He added that housing demand was set to be increasingly pressurised over the coming months by rising affordability pressures stemming from higher interest rates, modest real disposable income growth and elevated house prices.
Mr Archer went on to predict a further interest rate rise in autumn making it increasingly difficult for potential buyers.
"Nevertheless, house price growth seems likely to slow relatively gradually overall during the coming months. While demand is slowing and market tightness is easing, housing supply levels are still below long-term averages, so vendors in many areas still have some pricing power," he said.
The forecast for house price inflation is for the current growth to eventually settle down.
Furthermore, few vendors are having to sell for "distressed' reasons, so can afford to delay selling in the hope of eventually achieving a price near to what they are looking for. This will remain the case unless the economy takes a sharp downturn and unemployment starts rising markedly, which currently seems unlikely in the near term at least.
Consequently, we expect house price inflation to eventually settle down into an extended period of modest rises.
Meanwhile, the Bank of England's monetary policy committee meets this week to set rates with most analysts predicting a freeze as members look to gauge the effects of the five rises in the last 12 months.