Financial News: UK Mortgage Approvals Fall

UK Mortgage Approvals Fall

(RTTNews) - UK mortgage approvals decreased in November and consumer credit posted a faster growth, data from the Bank of England showed on Monday.

Net mortgage approvals for house purchase, which is an indicator of future borrowing, fell 500 to 64,500 in November. Approvals were forecast to fall more sharply to 64,000.

Meanwhile, approvals for remortgaging increased 3,200 to 36,600 in November.

The 'effective' interest rate, which is the actual interest paid on newly drawn mortgages increased for the first time since February 2025, to 4.20 percent from 4.17 percent in October, the BoE said.

Consumer credit rose to GBP 2.1 billion from GBP 1.7 billion in the previous month. The annual growth in consumer credit accelerated to 8.1 percent from 7.5 percent in the prior month.

Data showed that households deposited an additional GBP 8.1 billion with banks and building societies in November, up from GBP 6.7 billion in October.

In November, businesses borrowed GBP 6.3 billion from banks and building societies following net repayment of GBP 1.2 billion in October. The annual growth rate of borrowing by large businesses came in at 7.2 percent in November compared to 6.9 percent in October. Similarly, annual growth rate of borrowing by SMEs rose to 1.9 percent from 1.6 percent, and hit the highest since July 2021.

Last year, the BoE reduced its benchmark interest rates four times and also signaled further reductions this year. In December, the bank lowered its key rate by 25 basis points to 3.75 percent, the lowest since early 2023.

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