House sales a boost for Brown

CHANCELLOR Gordon Brown today put the finishing touches to his Pre-Budget Report, boosted by fresh evidence that the housing market remains in good shape and consumers are still happy to spend.

Mortgage lending by the big High Street banks totalled £10.6bn in October, an 8% increase on September, according to figures from the British Bankers' Association (BBA). Stripping out repayments and redemptions, mortgage lending was £4bn, 7% higher than in September. The number of new loans approved in October was 12% higher than the previous month.

The news will come as a relief to the Chancellor. A sharp decline in mortgage activity in September triggered fears that the housing market, a key driver of consumer confidence, was on the brink of collapse.

BBA chief executive Ian Mullen, said: 'October's strong lending figures may, in part, be a reaction to September's dip in demand. However, there is no doubting the underlying buoyancy in the mortgage market.'

Consumer credit, which includes credit card borrowing, personal loans and overdrafts, rose by £708m against September's £676m.

Sterling was a third of a cent weaker today at $1.4075, or 62.50p to the euro.