Mortgage approvals have risen to a 15-month high as overall borrowing rose, latest figures show.

It’s the most recent sign that the UK recession declared for the second half of 2023 may already be over.

Not since October 2022, before the mortgage rate spike in the wake of the Liz Truss mini-budget, have approvals been so high.

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A total of 55,200 mortgages were approved in January, the Bank of England said, up from 51,500 in December.

The number of people re-mortgaging – a figure that can represent people experiencing difficulty meeting monthly repayments – remained steady at 30,900, the data showed.

It came as the Bank said the interest rate actually paid on new mortgages fell to 5.19% in January, down from 5.28% a month earlier.

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Borrowing overall also rose more than expected to £1.9bn, up from £1.3bn in December, the Bank’s money and credit data for January said.

But rather than signalling people want to spend more and rack up debts, the UK Economist at Capital Economics, Ashley Webb, said it likely reflects the rebound in retail sales for the month.

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A surprise 3.4% growth in retail sales – the largest expenditure across the UK economy – was another key economic sign that the recession could be short-lived.

The UK met the definition of recession – two three-month periods where the economy shrinks – last month when the Office for National Statistics announced a measure of economic output, gross domestic produce (GDP), shrank 0.3% between October and December.

“January’s money and credit figures suggest the drag on consumer spending and the housing market from higher interest rates is easing, which suggests an economic recovery, at least in some sectors, has already begun,” Ms Webb said.

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“Overall, real GDP may still contract in Q1 but the signs of life in the housing market suggest that the “recession” will be over soon, if it’s not already.”

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