The UK money and credit release should continue to report strong growth in unsecured credit to households but sluggish mortgage growth.
There are few signs of a meaningful acceleration in housing demand. For example, the April RICS survey reported no growth in new buyer enquiries. Therefore, Societe Generale expects only modest growth in approvals from 61.8k to 63.0k.
Moreover, it is noteworthy that remortgaging activity is stagnant which suggests that existing homeowners are finding it difficult to find deals as attractive as their current ones, despite the extremely low level of mortgage rates. Growth in M4 ex IOFCs has been stable around 5% 3mth pa in the latest three months although growth in the lending counterpart is less buoyant at around 2%.
The firm rate of growth in the money supply is encouraging and should be generally supportive of strong continuing growth in economic activity.
