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UK mortgage approvals hit 2-year high, consumer credit growth strongest in a decade

[LONDON] British mortgage approvals hit a two-year high in January and consumer credit expanded at the fastest pace in a decade, according to Bank of England data that is likely to add to the case for a tightening of lending requirements by the central bank.

Mortgage approvals for house purchases numbered 74,581 in January from 71,335 in December. Analysts in a Reuters poll had forecast 74,000 mortgage approvals were made last month.

Consumer credit grew by 9.1 per cent year-on-year in January, picking up speed from December to hit its fastest pace since January 2006.

Britain's economic recovery is still heavily reliant on spending by households many of which have been buoyed by strong growth in the value of their homes.

The Bank of England has said it may raise the amount of money banks are required to put aside to cover their lending as the economy continues its recovery from the financial crisis.

Some debt charities have also expressed concern about the pace at which consumers are taking on credit.

The number of mortgage approvals rose throughout most of 2015, following a slowdown the previous year when tougher checks on mortgage borrowers were introduced.

A separate survey of bank lending in January published by an industry group last week showed rising demand for mortgages for buy-to-let properties ahead of the introduction of a new tax on the sector in April.

As well as using the new tax as a way to slow the buy-to-let sector, the government is planning to allow the Bank of England (BoE) to curb lending to landlords.

Net mortgage lending, which lags approvals, rose by 3.73 billion pounds in