British mortgage approvals and consumer credit rose unexpectedly in July, but weak mortgage lending pushed total net lending to its lowest since March, Bank of England (BOE) figures showed today.
The figures reinforced analysts' views that British house prices -- a major driver for consumer morale -- have reached a plateau, and are vulnerable to further falls if the economic outlook darkens.
The BoE said mortgage approvals numbered 48,722 in July, rising from an upwardly revised 48,562 in June but well below the 21-month peak of 59,117 hit in November.
Economists had forecast a reading of 46,500 on average, and said the stronger data was not enough to shift their downbeat view on the prospects for British house prices.
Net mortgage lending was significantly weaker than forecast, falling to just £86 million from a downwardly revised £518 million in June, well below economists' predictions of a rise to £700 million.
This was the weakest reading since March, and dragged down total monthly net lending to £258 million from £460 million. This decline came despite a better-than-expected performance from consumer credit, which rose by £173 million after a £59 million drop in June.
Separate figures showed the BoE's preferred money supply gauge -- M4 excluding intermediate other financial corporations -- was unchanged on the month, the weakest reading since January.
While aggregate monthly M4 growth was up 0.4 per cent, its strongest reading since October last year, annual M4 growth slowed further to 2.3 per cent, its weakest since the data series started in July 1983.
Members of the BoE's Monetary Policy Committee have discussed loosening monetary policy at their past two monthly meetings. However, most economists still believe the central bank is likelier to tighten policy rather than loosen it.
Reuters