UK Mortgage Approvals Lowest Since 2017; Consumer Borrowing Slows Sharply
01 Mai 2019 - 10:03AM
RTTF2
UK mortgage approvals for house purchase fell to its lowest
level in over a year in March and consumer credit growth was the
weakest in nearly five-and-a-half years as the original Brexit
deadline approached, figures from the Bank of England showed on
Wednesday.
Mortgage approvals for house purchase fell to 62,341 in March
from a revised 65,340 in February. Economists had forecast 64,400
approvals.
Approvals were the lowest since December 2017, when they were
61,508.
In contrast, data released last week by UK Finance had shown
that mortgage approvals hit a nine-month high in March.
Net mortgage lending grew to GBP 4.1 billion in March versus GBP
3.3 billion in February. Economists had forecast GBP 3.5 billion
lending.
UK house prices rose at the fastest annual pace in five months
in April, but inflation remained subdued, survey data from the
Nationwide housing society showed earlier on Wednesday. The house
price index rose 0.9 percent year-on-year following a 0.7 percent
increase in March. Economists had expected the inflation rate to
remain unchanged.
Consumer credit grew by GBP 0.5 billion in March after a GBP 1.2
billion increase in February. Economists had forecast GBP 1 billion
growth.
The latest increase was the lowest since November 2013 and the
weakness was largely due to a fall in new lending for car finance,
the bank said. Stronger repayments led to a fall in credit card
borrowing.
The annual growth rate of consumer credit fell to 6.4 percent in
March, which was the lowest since September 2014, when it was 6.1
percent. Meanwhile, the growth rate of credit card lending ticked
up for the first time since June 2018, to 6.6 percent.
"The subdued rise in borrowing in March may be because Brexit
has sapped households' desire to borrow to buy big items," Capital
Economics economist Paul Dales said.
"At the aggregate level, low interest rates mean that debt is
still manageable."
The UK's departure from the European Union was originally
scheduled to take place on March 29. However, the lack of a
post-Brexit deal led the EU to set a new deadline of October
31,
Due to the lack of agreement on a Brexit deal, UK Prime Minister
Theresa May requested for an extension of the original deadline of
March 29 for the UK to exit the European Union. Consequently, the
EU agreed that the country should leave the union by October
31.
Annual growth in lending to large non-financial businesses eased
to 3.9 percent from 5.6 percent in the previous month, the central
bank data showed. Loans to small and medium enterprises decreased
0.1 percent annually, reversing the similar size growth in the
previous month.
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