BRITISH consumer credit hit a five year high in April while the country's broad measure of money supply kept up its rapid pace of growth, backing evidence that domestic confidence has returned with gusto.

Tax cuts which kicked in last month, historically low home loan rates and windfall payments from maturing tax free investments (TESSAs) are all expected to rejuvenate consumer demand in 1996. It grew by a below trend 2.3 per cent in 1995.

The British Bankers' Association said that consumer credit surged by £566 million sterling in April - the biggest monthly rise since records began in 1991.

At the same time, Bank of England data showed the M4 measure of money supply grew by a robust year on year rate of 10 per cent in March, the sixth consecutive month it has breached the upper limit of the government's monitoring range.

Optimism is also helped by the fact that the housing market is emerging from a prolonged recession.