Mortage Approvals up but Inflation threatens to rise

After a slowdown in mortgage approvals in December The number of mortgage approvals increased to 120,000 in January, according to figures released by the Bank of England.

However the CBI report an upward pressure on prices from the factory gate. This continued inflationary pressures increases the likelihood of further interest rate rises in the UK.

Andrew McLaughlin, chief economist at RBS said:

“Prices-charged inflation hit a series high while cost inflation remains elevated. Such signs that inflationary pressure is still building in the manufacturing sector, coupled with strong manufacturing growth, should provide additional ammunition for the more hawkish members of the MPC.”

RBS produce the stats for the CIPS (Chartered Institute of Purchasing and Supply)
However some economists are now speculating that if the global stock market uncertainties spill over into the UK economy the likelihood of interest rate rises may diminish.