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Mortgage approvals plummet

LENDING to firms and households showed little sign of picking up in January from historically weak levels, in spite of a year of quantitative easing, Bank of England data showed yesterday.

The Bank’s preferred measure of broad money growth M4, which excludes activity between intermediate financial institutions, stagnated in January. The annualised quarterly rate of growth was only 1.9 per cent, well below the 6-9 per cent range the Bank is targeting.

The Bank of England’s £200bn quantitative easing programme has been aimed at supporting money supply growth during a credit freeze and financial downturn. But Vicky Redwood at Capital Economics said: “Even the £200bn of money that the MPC has pumped into the economy may not be enough to drive the pick-up in money and lending growth that we believe a strong economic recovery depends on.”