UK Mortgage Approvals Remain Broadly Stable
(RTTNews) - UK mortgage approvals remained almost stable in June despite an increase in the mortgage rate, reflecting the strength in the housing market.
Net mortgage approvals for house purchases, an indicator of future borrowing, totalled 59,976 in June compared to 60,134 in May, the Bank of England said Monday. The figure was almost in line with the forecast of 60,000.
Mortgage debt increased to GBP 2.7 billion in June from GBP 1.3 billion in May, while it was forecast to fall to GBP 1.2 billion.
Gross lending fell to GBP 20.8 billion from GBP 22.6 billion a month ago.
The 'effective' interest rate on newly drawn mortgages rose slightly by 3 basis points to 4.82 percent.
Consumer credit decreased slightly to GBP 1.2 billion from GBP 1.5 billion in the prior month. The annual growth for all consumer credit softened to 8 percent from 8.4 percent in May.
Private non-financial corporations raised about GBP 6.7 billion of finance in June, up from GBP 4.2 billion in May. This was driven by GBP 4.0 billion of net bond issuance and GBP 3.6 billion of loans by banks and building societies.
Data provided a bit more evidence that the drag from higher activity is starting to fade, which supports the view that the economic recovery may be a bit stronger than most analyst expect, Capital Economics' economist Ashley Webb said.
The Bank of England is a bit less likely to cut interest rates to 5.00 percent from 5.25 percent this Thursday, although it remains a very close call, the economist noted.
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