Bank lending tops £10bn in July

The total amount of money lent to customers by banks increased in July to top £10 billion for the first time since records began, new figures released yesterday show.

Statistics from the Bank of England also showed that banks had to write off £3.74 billion of loans in the first six months of 2007, compared to £702 million in 1997. The amount written off equates to almost £20 million each day.

Despite fears of a slowing property market, the number of mortgages approved by banks and building societies remained at 115,000 in July, compared to June, despite interest rates increasing to 5.75 per cent during the month.

Vicky Redwood of Capital Economics told the Times: "The fact that mortgage demand remains strong for now no doubt explains why house price inflation has so far softened only slightly."

According to Credit Action statistics released earlier this month, total UK personal debt was £1,345 billion at the end of June, an increase of 10.2 per cent on the previous 12 months.