(Bloomberg) -- U.K. mortgage approvals jumped to the highest since before the financial crisis in October as buyers rushed to take advantage of tax incentives.
Lenders approved 97,532 loans in October, the most since 2007, the Bank of England said Monday. Net consumer credit fell by 590 million pounds ($785 million) as households paid down debt, mostly on credit cards.
The housing market is defying a broader economic downturn because of pent-up demand from the Covid lockdowns and a temporary tax break on home purchases. The U.K. is heading for a double-dip contraction in the fourth quarter after the government stepped up restrictions over November.
The BOE expects the unemployment rate to climb higher than 7% next year from the current 4.8%. Economic output won't recover to pre-pandemic levels until 2022, the central bank's latest forecasts show.
Small and medium-sized non-financial businesses borrowed 1.7 billion from banks on balance in October, while large businesses repaid 6.7 billion pounds.
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