Mortgage approvals rose again in April but lending to businesses fell by almost £5 billion as firms continued to feel the squeeze.

Bank of England figures today showed lenders approved 43,201 mortgages for house purchases in April, up 8% on the 40,038 in March.

It was the third monthly rise in a row and added to the growing evidence that the worst of the slump in the housing market has passed.

Philip Shaw, UK economist at Investec, said: “Although it is an upward grind rather than a jump, at least it is a steady upward grind, and it's consistent with a steady recovery in housing market activity. It is another helpful indicator in terms of the general recovery in the economy.”

But others warned approvals are still a long way below the 75,000 level required for house prices to rise steadily. “We need to see it rise further yet before we can say that the rout in house prices has ended,” said George Buckley of Deutsche Bank.

The Bank of England also said lending to firms dropped by £4.7 billion in April despite its decision in March to start printing money to drag the economy out of recession.

Colin Ellis, European economist at Daiwa Securities, said the figures were “the clearest indication yet” that the £125 billion quantitative easing policy is not yet having an impact.

“It is still early days, but that could imply that the Bank ends up having to ramp up its purchases even further, something that, at the same time, could further heighten concerns about future inflation,” he said.