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UK consumer credit growth hits more than one-year low in July, mortgage approvals surge - BoE

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UK consumer credit growth hits more than one-year low in July, mortgage approvals surge - BoE

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LONDON (Reuters) – British consumer credit expanded at the weakest pace in more than a year during July, reflecting the squeeze on household finances this year, Bank of England data showed on Wednesday. Annual growth in consumer credit slowed to 9.8 percent from 10.0 percent in July, the weakest increase since April 2016, the BoE said. In cash terms, consumer credit increased by 1.179 billion pounds – below the 1.5 billion pound consensus in a Reuters poll of economists and the smallest rise this year. Britain’s economy has had its slowest start to the year since 2012, as consumers have come under pressure from a big rise in inflation since sterling fell after last year’s Brexit vote. Wednesday’s data showed a mixed picture for the housing market. The BoE said lenders approved 68,689 mortgages in July compared with 65,318 in June, topping all forecasts in a Reuters poll of economists that pointed to 65,500 approvals. Earlier this month the BoE said it expected mortgage approvals to average around 66,000 a month over coming quarters. But the value of mortgage lending increased by 3.601 billion pounds in July, slowing from 4.134 billion pounds in June. Figures last week from industry group UK Finance showed mortgage approvals picked up in July, although the value of loans made increased by the smallest amount since April 2016. Most economists see a subdued outlook for Britain’s housing market over the next couple of years, largely due to the weakness of Britain’s consumer-led economy. Mortgage lender Nationwide on Tuesday said British house price growth eased to a three-month low in August.

(Reporting by Andy Bruce and Michael Urquhart)
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