The number of mortgage approvals in September were at their highest in more than two years, the Bank of England said on Monday, reinforcing expectations its monetary policy committee will increase interest rates to 5 per cent next month.

The loan data is considered by analysts to be a good lead indicator of future housing market activity, and shows that homebuyers have not been put off by the Bank’s surprise 0.25 percentage point hike in the cost of borrowing in the summer.