UK lenders expect consumer lending to pick up in third quarter - BoE

LONDON, July 12 (Reuters) - British lenders expect demand for consumer borrowing to pick up in the third quarter, a Bank of England survey showed on Thursday, echoing signs of a broader recovery in the economy after a slow start to 2018.

The BoE, which has been urging banks to avoid risks in their lending to households, also reported lenders intend to keep supply of mortgage lending broadly steady over the next few months.

Britain's housing market has been struggling for momentum over the last year, in part reflecting a squeeze on consumers from rising inflation since the Brexit vote in 2016 and weak wage growth.

Earlier on Thursday the Royal Institution of Chartered Surveyors said British house prices remained flat in June and the market was likely to stay sluggish in the coming months despite more properties being put up for sale.

Lenders in the BoE survey said demand for small business loans had increased over the last three months, but they expected demand for loans from large businesses to fall in the current quarter.

(Reporting by Andy Bruce, editing by William Schomberg)

((andy.bruce@thomsonreuters.com; +442075423484; Reuters Messaging: andy.bruce.thomsonreuters.com@reuters.net))