Mortgage lending and consumer credit weak

City A.M. Reporter
Mortgage approvals for house purchase and consumer credit continued to herald weak consumption ahead, official data showed on Friday, despite both rising more than expected in June.

The Bank of England said mortgage approvals numbered 48,421 in June, up from 46,418 in May and the highest number since May 2010. Analysts had forecast a reading of 46,000.

Consumer credit rose £0.4bn. However, net mortgage lending fell by £0.1bn, confounding expectations for a £1bn rise, and overall lending growth slowed to £0.4bn from £1.4bn in May.

Consumers have been reluctant to take on more credit for major purchases as uncertainty over jobs is weighing on sentiment.

With mortgage approvals running at half their long-term average, there's also little hope that the housing market will pick up soon and provide impetus for the faltering economy.

The Bank's preferred gauge of money supply, M4 excluding intermediate other financial corporations, fell 0.1 per cent on the month after a 0.4 per cent rise in May.