LONDON – The number of new home loans approved in the U.K. fell in June to its lowest level in nine months, a sign the country's housing market may be slowing as consumers pull back on spending.
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Mortgage approvals fell in June to 64,684 from 65,109 a month earlier, the Bank of England said Monday. This was the lowest number of new approvals since September last year.
The data add to signs of a continued economic slowdown of the domestic-driven economy, triggered by accelerating inflation and tepid wage growth in the wake of the country's vote last year to leave the European Union.
The figures also suggest that Britons may be becoming more wary about taking on long-term debt amid declining consumer confidence.
The property market is a closely-watched gauge of the overall health of the economy. Consumers, the main engine of growth for the U.K. economy, tend to pare back spending when the value of their homes declines.
The economy grew 0.3% on the quarter in the three months through June, according to a preliminary estimate published late last month, only a touch faster than in the first quarter, but still less than half the speed seen in the final three months of last year.
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Separately, the BOE data showed that net of repayments, consumers borrowed 1.5 billion pounds ($1.68 billion) in June in personal loans, overdrafts and on credit cards. This was in line with the expectations of analysts polled by The Wall Street Journal.
The June figure was below the GBP1.8 billion seen the previous month, again signaling growing reluctance to borrow, but enough to keep the annual rate of growth in consumer credit at 10%.
Growth in consumer credit accelerated in the run up to last year's Brexit referendum and has remained at a double-digit level for over a year.
BOE officials have warned lenders to keep a close eye on borrowers to ensure they aren't taking on loans they can't repay.
Rate-setters are expected to keep their benchmark interest rate steady at 0.25% at a policy meeting this week, though analysts expect two or three policymakers to dissent in favor of higher borrowing costs.
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(END) Dow Jones Newswires
July 31, 2017 04:51 ET (08:51 GMT)