Lending to Britons surged towards the end of 2015 at the fastest rate in almost a decade but manufacturing growth slipped, according to figures yesterday that underscored Britain’s reliance on consumers to drive its economy. 
Net lending to consumers rose 8.3% in the year to November, the Bank of England said, in what was the fastest credit growth since February 2006. To date the bank has dismissed the idea that Britain’s economic recovery is disproportionately reliant on debt. 
Stronger-than-expected lending growth and mortgage approvals helped lift sterling from a nine-month low against the dollar yesterday, a weakness that partly reflects concerns that the economy might be too weak to justify an interest rate rise this year. 
Although Britain’s economy probably ended last year as one of the fastest-growing in the developed world for a second year in a row, there are concerns that the growth is unbalanced and may be hurt by a likely in/out referendum this year on European Union membership. 
News that growth in British manufacturing slowed more than expected in December, as export orders took a hit, was a reminder of Britain’s reliance on domestic demand. 
The Markit/CIPS manufacturing purchasing managers’ index (PMI) dropped to a three-month low of 51.9 from 52.5 in November, at the bottom end of expectations in a Reuters poll that forecast a consensus reading of 52.7. 
Manufacturing failed to contribute to Britain’s economic growth through the first three quarters of 2015, with the much larger services industry instead driving the recovery. 
“Looking ahead, manufacturing looks set to play firmly second fiddle to services in driving growth in 2016. That prediction is consistent with the household borrowing numbers for November,” Martin Beck, economist at the EY ITEM Club consultancy, said. “A further acceleration in lending may well make 2016 the year when the (Bank of England’s) Financial Policy Committee really makes its presence felt.” 
In cash terms, unsecured lending to consumers was up £1.476bn ($2.18bn) from the previous month, beating economists’ forecasts in a Reuters poll and showing a similar picture to industry figures released before Christmas. 
Lenders also granted more home loans than expected, with 70,410 mortgages for house purchase approved in November, the highest number in three months. Net mortgage lending, which lags approvals, rose £3.873bn, the biggest monthly increase since April 2008. 
In November, the BoE rejected the idea that Britain was in a debt-fuelled boom, and stimulative credit conditions are more likely to trigger lending curbs by the bank than a rise in interest rates. 
The central bank said last week it is watching consumer credit and mortgage lending closely, and in 2014 regulators tightened mortgage rules, temporarily cooling house price rises. 
EEF, a business group for manufacturers, said it hoped that signs of improvement in continental Europe would benefit British exporters, although weakness in China could counteract this.