Lending to UK consumers cools in July
london — Lending to British consumers expanded at the weakest pace in more than a year in July as their confidence in the economy ebbed, according to figures that clouded the outlook for growth later this year.
Annual growth in consumer credit slowed to 9.8 per cent from 10 per cent in June, the weakest increase since April 2016, the Bank of England (BoE) said on Wednesday.
Separate figures from the European Commission showed British consumer morale slipped this month, pulled down by deteriorat- ing confidence in the state of the economy.
Britain’s economy has had its slowest start to the year since 2012 as consumers have come under pressure from a big rise in inflation since sterling fell after last year’s Brexit vote.
“With real income barely growing and the savings ratio at historically low levels, households are now significantly stretched financially,” said Barclays economist Fabrice Montagne.
The BoE said that in cash terms, consumer credit increased by £1.2 billion ($1.5 billion) in July — well below the £1.5 billion consensus in a Reuters poll of economists and marking the smallest rise this year.
Wednesday’s data showed a mixed picture for the housing market. The BoE said lenders approved 68,689 mortgages in July compared with 65,318 in June, topping all forecasts in a Reuters poll of economists that pointed to 65,500 approvals.
But the value of mortgage lending increased by £3.6 billion in July, slowing from £4.1 billion in June.
Earlier this month, the BoE said it expected mortgage approvals to average around 66,000 a month over coming quarters. Taken together, Wednesday’s figures painted a murky outlook for Britain’s economy. — Reuters