UK Consumer Credit Growth Drops, The Lowest Mortgage Approval Since 2015

A couple view properties for sale in an estate agents window in London
A couple view properties for sale in an estate agents window in London, Britain August 22, 2016. REUTERS/Peter Nicholls/File Photo

LONDON – Lending to British consumers cooled in the month after the vote to leave the European Union, countering other signs that Britons had taken the decision in their stride, Bank of England data showed on Tuesday.

Consumer credit, which includes credit cards and personal loans, rose 1.181 billion pounds last month, the weakest increase since August 2015, taking the annual growth down to 10.1 percent from 10.3 percent.

That marked the first annual decline in consumer credit growth since December 2014.

Other data since the shock Brexit vote had shown little immediate impact on consumer demand. Retail sales rose rapidly last month, and there have also been signs consumer morale has recovered partially from a big fall following the referendum.

The figures also showed mortgage approvals for house purchases fell to 60,912 last month from 64,152 in June, the lowest since January 2015.

The Brexit vote had an immediate impact on Britain’s housing market, causing buyer interest and expectations of future sales to wither at their fastest pace in years, according to the Royal Institution of Chartered Surveyors.

RICS also reported that investment demand for British commercial property nosedived after the result.

Less comprehensive figures from the British Bankers’ Association showed the number of mortgages approved by British banks fell to its lowest in a year in the month following Britain’s vote to leave the European Union.

The number of approvals rose throughout most of 2015, following a slowdown the previous year when tougher checks on mortgage borrowers were introduced.

Net mortgage lending, which lags approvals, rose 2.665 billion pounds in July, compared with a 3.247 billion pound increase in June, the BoE said.

Lending to non-financial businesses increased 3.0 percent compared with July 2015, the strongest annual growth rate since records started in April 2012.

(Reporting by Andy Bruce and Giles Elgood)

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