	u k credit policy seen steady despite bank data an unexpectedly heavy billion stg surge in u k september sterling bank lending is unlikely to nudge the bank of england towards tightening monetary policy as long as sterling remains in its present robust state economists said an acute crisis of confidence in equity markets over the past two days will in any case subdue personal consumer credit demand which has largely been behind growth in lending in the normal course of events the markets would have been extremely worried about that figure noted peter spencer u k economist with credit suisse first boston after an initial dip in reaction to the bank lending data which compared won stg august rise u k government bonds gilts soared as investors continued to flee from plummetting equities into the relative security of government securities equity markets dropped sharply on the news touching a day s low of on the ftse index after the data before staging a recovery sterling held its buoyant tone throughout u k money market rates in a similarly calm response resumed the slightly easier trend of earlier in the morning after little more than a token blip as the figures came out noting that such a huge rise in credit extended by banks would under other circumstances have prompted market fears of a rise in clearing bank base rates from the current pct with the financial markets doing what they re doing that s the last thing the bank of england would want to do spencer said the monetary situation is clearly very bad but as long as sterling is firm the authorities are unlikely to put rates up said kevin boakes chief u k economist at greenwell montagu gilt edged boakes pointed to a rise in the narrow money measure m to pct year on year from august s pct growth which he said must cause some concern at the treasury but the fact that overall broad money growth has slowed down is a rather encouraging sign noted paul temperton u k economist with merrill lynch capital markets he pointed to a fall in the year on year growth rate of the m broad money aggregate to pct in september from august s pct it was concern about credit growth which prompted the bank of england to engineer a one point rise in u k bank base rates to pct in early august caution endorsed subsequently by news of a massive billion stg july rise in bank lending temperton noted that a particular focus of bank worry in that period had been the behaviour of u k asset markets housing and equities were the key two asset markets in influencing consumer behaviour he said in the light of the precipitous falls on u k equity markets in the past few days there will almost certainly be a straightforward impact on consumer spending and on retail sales temperton said almost certainly we can look forward to slower growth in consumer borrowing if the equity shakeout continues he added i think the stock market has decided that the bank lending figure is a thing of the past we are talking about a very serious panic and a flight to quality spencer said a u k treasury official said that it was important to look at all the monetary information not just the bank lending adding that monetary aggregates were growing much more slowly than bank lending senior banking sources noted that the surge in bank lending was evidence of the continuing recent trend of fairly heavy personal sector borrowing figures from the banking information service showed personal sector lending by u k clearing banks rose by billion stg in september after a mln stg august rise much of the rise reflected quarterly  payments reuter 
