British mortgage lending rose three times faster than expected in December after approvals edged up from November's record low, but economists said data did not herald a housing market turn-around.

The Bank of England said that banks lent a net £1.903 billion for home purchase last month, up from £834 million in November and far better than the fall to £600 million forecast on average by economists polled beforehand by Reuters.

Some 31,000 mortgages were approved compared to November's record low of 27,000, but this is still less than half the number in December 2007 when the slump in British house prices was already underway.

"The report chimes with some elements of the Royal Institute of Chartered Surveyors' survey showing an upturn. However it is wrong to say the housing market is recovering and does not derail the prospects of lower interest rates next week," said Philip Shaw, an economist at Investec.

Most economists expect the Bank of England to cut interest rates by half a percentage point next week to a fresh record low of 1 percent, and BoE Governor Mervyn King has highlighted the failure of banks to lend to businesses and consumers as a key driver of the economic downturn.

The pound rose against the euro and dollar as investors priced in a slight improvement in the outlook for the economy.

"It's clearly better than expected, but it's important to remember that we're coming off all-time lows," said Amit Kara, economist at UBS. "These numbers are consistent with further pretty sharp falls in house prices."

Credit card data showed Britons tightened their belts in December. They borrowed a net £905 million on plastic, down from £1.375 billion a year ago - equivalent to a £67 million repayment on a seasonally adjusted basis, the first since May 2007.

Britons still owe a total of 53.892 billion pounds on credit cards, almost £1,000 each for every man, woman and child.

The data also showed that a £4 billion consumer credit securitisation took place in December, with the assets moving off banks' books to other lenders, though the BoE was unable to provide further details.

Figures on money supply published at the same time showed broad M4 growth slowed to 16.1 percent year-on-year in December from November's record high of 16.2 percent.