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UK banks increase mortgage lending

Banks in the UK significantly increased their mortgage lending over the summer months.

This is according to the Bank of England (BoE), which said the figures show the impact being made by efforts to bolster the flow of credit, the Daily Telegraph reports.

It was demonstrated that the overall availability of secured credit to households grew markedly in the quarter to September - a trend that went against previous expectations for the period.

The BoE noted falling borrowing rates have highlighted the early effect of its scheme, although worldwide economic troubles weighing on markets might result in total lending dipping over the next 18 months.

Vicky Redwood, chief UK economist for Capital Economics, stated: "Overall, the outlook for bank lending is better than it was a few months ago, helped by the latest policy initiative."

Ms Redwood added, however, that the process of getting credit to flow freely through the economy once again is likely to be slow and long.

By Claire Archer