UK consumer credit bounces back in May, Bank of England says

British consumers increased their borrowing in May by the most in four months after a dip in April, Bank of England data showed on Monday, adding to signs of recovering momentum in the country’s economy.

Consumer borrowing grew by a net 1.5 billion pounds ($1.9 billion), the most since January and up from a increase of 790 million pounds in April.

The increase in May – when retail sales also rebounded, according to official data – was slightly stronger than a median forecast for a net rise of 1.45 billion pounds in a Reuters poll of analysts.

Britain’s economy has shown signs of revival after a short and shallow recession in the second half of last year.

Separate data published on Monday showed Britain’s factory sector grew in June albeit at a slower pace than in May.

Prime Minister Rishi Sunak says the improvement shows his policies are working after the shocks of the COVID pandemic and the surge in energy prices. But opinion polls suggest the opposition Labour Party will win Thursday’s national election.

The BoE said mortgage approvals dipped slightly in May to 59,991 from April’s 60,821, close to the Reuters poll forecast.

Earlier on Monday, mortgage lender Nationwide said British house prices showed a small gain in June from May but the impact of higher borrowing costs continued to weigh on the property market.

($1 = 0.7888 pounds)