Inflation clues in lending

A SURGE in lending to property investors spurred on by strong employment levels and rising rental values is another indication that inflationary pressures may be building up in the economy.
However, economists and analysts say interest rates are likely to stay on hold at 6.25 per cent until the end of the year.
For a second consecutive month, home-loan approvals grew -- but below the expectations of economists. The 0.3 per cent rise in borrowing by owner occupiers was overshadowed by the major rise in lending to investors.
The strength of the rental market, which has vacancy levels of about 2 per cent nationally, helped increase loans to property speculators by 4.6 per cent to $6.1 billion.
St George chief economist Steve Ryan said that after two years of weakness the most encouraging aspect was the lift in loans to investors.