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Latest data show UK economy still sluggish

Latest data show UK economy still sluggish
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Lending to British consumers and homebuyers rose less than expected in March according to figures released by the Bank of England.

It was more evidence of a sluggish UK economy coming after tepid first-quarter growth figures and word that house prices are stagnant and the construction sector is weak.

As a result economists are pushing back their expectations of an interest rate rise there to the end of the year.

The BoE data showed that growth in net unsecured consumer lending slowed to 0.1 billion pounds in March, well below the 0.45 billion pound increase that had been forecast in a Reuters poll.

Net mortgage lending also rose less than expected, with a 0.4 billion pound increase.

Mortgage approvals were a relative bright spot, with 47,557 home purchases given the go-ahead in March.

Data released by mortgage lender Nationwide earlier showed a 0.2 percent fall in house prices last month, the biggest drop since November last year. Nationwide expects house prices to be flat or to fall slightly for all of 2011.

Weak housing market activity is having a knock-on effect on the construction sector.

Sterling fell to a 13-month low against the euro on the data.