British mortgage approvals dipped to the lowest level since May 2015 in the weeks around last month's vote to leave the European Union, but lending to consumers expanded at the fastest pace in almost 11 years.
The Bank of England said lenders approved 64,766 mortgages in June compared with 66,722 in May, extending a gentle slide since the start of the year and undershooting analyst expectations for 65,650 mortgage approvals.
The figures shed little light on how Britain's economy has reacted to the June 23 referendum.
Lending to consumers expanded 10.3 percent year-on-year in June, the fastest annual growth since October 2005, but the Bank of England has said it expects credit growth to ease in the second half of this year.
British consumer morale suffered its sharpest drop in more than 26 years after last month's decision by voters to leave the European Union, as Britons became increasingly pessimistic about the economic outlook, according to a survey overnight from market research firm GfK.
Worsening morale among consumers and businesses will probably spur the central bank into cutting interest rates next week to a new record low, according to economists polled by Reuters.
Net mortgage lending, which lags approvals, rose 3.348 billion pounds in June, the BoE said, much more than a forecast of 2.6 billion pounds in the Reuters poll but still some way off March's recent peak of 7.275 billion pounds.
The Brexit vote had an immediate impact on Britain's housing market, causing buyer interest and expectations of future sales to wither at the fastest pace in years, according to the Royal Institution of Chartered Surveyors.
Mortgage lender Nationwide said this had yet to be reflected in house prices, reporting that prices rose at their fastest annual pace in four months in July.
Less comprehensive figures from the British Bankers' Association showed the number of mortgages approved by banks fell to a 15-month low in June.
The BoE said consumer credit grew by 1.837 billion pounds, up from 1.599 billion pounds in May. Economists had expected an increase of 1.4 billion pounds.
The BoE said lending to non-financial businesses increased by just over a billion pounds in June, down from 3 billion pounds in May. On an annual basis, lending to business rose 2.7 percent, the strongest growth since the series started in April 2012.
Net purchases of British government bonds by foreign investors totalled 8.140 billion pounds in June, the highest since November 2015, the BoE said. (Reuters)
Source: www.businessworld.ie
