LONDON British mortgage approvals for house purchase rose in May to the highest level since December 2009, Bank of England data showed on Monday.
The Bank said mortgage approvals numbered 58,242 in May, up from 54,354 in April. Analysts had forecast a much lower reading of 55,050.
Consumer credit rose by a net 725 million pounds - the largest increase since December 2012. That compared with a rise of 557 million in April.
However, credit flow to businesses continued to disappoint.
Lending to non-financial businesses fell by a net 1.27 billion pounds in May. Within that, lending to smaller firms dropped by 452 million pounds.
Economists have been looking out for signs that the Bank's Funding for Lending Scheme, now almost a year old, is boosting the flow of credit to individuals and businesses.
The scheme has succeeded in lowering banks' finance costs and the cost of mortgages, but its impact on business lending has been less pronounced.
In April the central bank retooled the FLS, giving banks greater incentives to lend to small and medium-sized firms which complain they are starved of credit.
Monday's data showed that the Bank's preferred gauge of money supply, M4 excluding intermediate other financial corporations, rose 0.1 percent in May, taking the annual growth rate to 5.2 percent.
(Reporting by Olesya Dmitracova and William Schomberg)