The number of new home loans approved in the U.K. fell in March to its lowest level in six months, a sign the country's housing market may be slowing as consumers pull back on spending.
Mortgage approvals fell in March to 66,837 from 67,926 a month earlier, the Bank of England said Thursday, while mortgage lending, net of repayments, declined to GBP3.1 billion ($4.0 billion) from GBP3.4 billion.
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The data offer further signs that Britain's economy slowed in the first quarter as rising inflation and meager wage growth prompted consumers to cut back spending. The economy grew 0.3% on the quarter in the three months through March, according to a preliminary estimate published late last month.
The slowdown comes as voters prepare to go to the polls June 8 in a national election that's expected to return Prime Minister Theresa May and her governing Conservatives to power with an increased majority in Parliament. Mrs. May has said a bigger majority will strengthen her hand in coming negotiations with the European Union over the terms of Britain's exit from the 28-member bloc, expected in early 2019.
Thursday's data showed unsecured borrowing by consumers continued to rise in March, underscoring how households have been taking on debt to offset the squeeze on income.
Consumers borrowed GBP1.6 billion in March, net of repayments, in personal loans, overdrafts and on credit cards, the Bank of England said, keeping the annual rate of growth in consumer credit above 10%.
BOE officials have warned banks to keep a close eye on borrowers to ensure they aren't taking on loans they can't repay. Officials are expected to keep their benchmark interest rate steady at 0.25% at this month's policy meeting.
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(END) Dow Jones Newswires
May 04, 2017 04:53 ET (08:53 GMT)