Mortgage approvals up but borrowing weak

City A.M. Reporter
Lenders approved the highest number of mortgages since May 2010 last month, but unsecured consumer borrowing was unexpectedly weak, Bank of England figures showed.

Separate figures showed the Bank's preferred money supply gauge - M4 excluding intermediate other financial corporations - picked up to show growth of 0.6 per cent on the month, after a 0.1 per cent fall in June.

The Bank of England said mortgage approvals numbered 49,239 in July, up from an upwardly revised 48,500 in June.

Analysts had forecast a reading of 49,000, and these numbers are still well below the levels seen before the financial crisis in 2008.

Net consumer credit increased by just 0.205 billion pounds, less than the 0.4 billion pound increase in June - which analysts had expected to see again in July - and the weakest lending growth since January this year.

Net mortgage increased in line with forecast, growing by £700m.

Consumers have been reluctant to take on more credit for major purchases as bank lending conditions are relatively tight and uncertainty over jobs is weighing on sentiment.