Lending to Britain's consumers rose at the fastest pace in more than 4-1/2 years in September and mortgage approvals for house purchase also beat forecasts, official data showed on Monday.
The figures boost hopes of a sustainable recovery in economic activity after the GDP posted the strongest quarterly growth in five years between July and September -- partly due to one-off factors -- and follow official data showing that retail sales rose in September.
Consumer credit rose by 1.199 billion pounds last month, the strongest rise since February 2008, driven by a 893 million increase in overdrafts and loans, Bank of England data showed.
Mortgage lending grew by 491 million pounds. Analysts had predicted a 0.18 billion pound rise in consumer credit and a 0.35 billion pound increase in mortgage lending.
The Bank said mortgage approvals numbered 50,024 in September, up from 47,921 in August, beating analysts' forecasts for 48,100.
The Bank is pinning great hopes on a new scheme to get credit flowing to households and business, which provides cheap funding to banks if they keep up lending.
The central bankers have cautioned, however, that it would take several months before the effect of the scheme, which started in August, became visible.
Before the 2008 financial crisis, monthly mortgage approvals ran at around 90,000, but the number of home sales has slumped since then and the property market has ceased to be a major driver of consumer spending.
Last week similar data from the British Bankers' Association showed a small rise in mortgage approvals in September, although they were still 6 percent down on the year.
The BoE's preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose 0.3 percent on the month after a 0.5 percent increase in August, taking the annual growth rate to 4.2 percent.
(Reporting by Olesya Dmitracova and Li-mei Hoang)