By Marcus Leach

Data from the British Bankers' Association (BBA) suggests that gross mortgage lending by the major UK banks reached its highest monthly level of the year in December.

Industry figures show that lending of £9 billion was 12% higher than in December 2010.

"December’s £9bn of new mortgages was the strongest month of last year, being 12% higher than in December 2010," BBA statistics director, David Dooks said.

"However, at the same time, the household sector generally is focusing on debt repayment amid inflated household expenses and a continuing air of uncertainty, so we see a reluctance to let net borrowing rise, with people preferring to use their bank account cash for expenditure.

"Business prospects are even more attuned to the state of the economy in the UK and in overseas trading markets, with borrowing intentions for growth or investment plans generally staying on the back-burner.”

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