The rise in equity withdrawal is consistent with the rebound in house price inflation. It shows spending growth is increasingly dependent on equity extraction on top of take home pay.
The key message is housing market activity has improved significantly into the second half of this year and confirms the downside risks to growth from the housing market are vanishing.
Growth has come back and there's still some further improvement left in the pipeline. I think the sentiment on the rate-setting committee is also evolving. With the data continuing to improve we could see a 9-0 vote fairly soon.
With growth back to trend, housing market indicators trending higher and consumer spending substantially improved from the mid-2005 weak spot we continue to believe the next move in rates is up not down.