UK mortgage equity withdrawal (MEW) eased in the first quarter after hitting a record in the final three months of 2003, a report said on Tuesday, in a tentative sign that Britons' appetite for debt may be cooling.
The Bank of England said MEW slowed to 15.8 billion pounds in the first quarter of the year from an upwardly-revised record of 17.4 billion in the fourth quarter of 2003. That amounted to 8.0 percent of household disposable income, down from 8.9 percent.
Analysts said that while the figures were by no means weak, they may be of some comfort to the Bank's Monetary Policy Committee, which has become increasingly worried about soaring house prices and mounting consumer debt.
"This is still an enormous amount of MEW but it will provide some reassurance to the MPC that policy tightening is having some effect," said Ross Walker, economist at RBS Financial Markets.
The MPC has already raised interest rates four times since November.
Policymakers are widely expected to leave interest rates unchanged at 4.50 percent at their meeting this week that concludes on Thursday, although analysts are nearly unanimous in predicting a quarter percentage point hike in August.
House prices have soared at double-digit rates over the past several years and have only recently showed tentative signs of slowing. In the meantime, Britons have been extracting cash from the rapidly rising value of their homes.
That equity withdrawal has helped to finance a consumer spending boom that has prompted interest rate hikes as the MPC seeks to quell future inflationary pressures and rein in rampant borrowing.
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