The pound nudged higher after it emerged that mortgage lending levels in the UK are back at levels not seen since the summer of 2004. In data out this morning, it was revealed that mortgage lending levels in November were back at levels seen in the heady summer of 2004 when the annual rate of house price gains was above 20 pct. Markets were forced to scale back somewhat expectations of lower UK interest rates next year after the news -- a factor that helped the pound move higher. In its monthly survey, the Building Societies Association said seasonally adjusted gross advances rose by 3.9 bln stg in November, up on the previous month and the highest since August 2004. The British Bankers' Association, meanwhile, said net mortgage lending in November rose by 5.1 bln stg -- a level not seen since July last year. And rounding up the data, the Council of Mortgage Lenders found gross mortgage lending rose by 28.5 bln stg -- again the highest since July 2004. And overnight, even the usually pessimistic Royal Institution of Chartered Surveyors survey found that house prices rose for the first time in 15 months during November, with London leading the charge higher "If the figures are seen as leading indicators, then consumer spending may also pick up," said Steve Pearson at HBOS With anecdotal evidence also pointing to a strong Christmas sales season, markets are scaling back rate cut predictions, he said. The pound had fallen back yesterday after Bank of England rate setter and chief economist, Charles Bean told the Sunday Times newspaper that the recent drop in inflation to 2.1 pct from 2.5 pct had removed one uncertainty from the BoE's projections His comments were seen as suggesting that UK interest rates will be cut in 2006. At 11.12 GMT, the pound was at 1.7673 usd from levels around 1.7630 ahead of the news. The euro, meanwhile slipped to 0.6777 stg from 0.6799 stg