UK mortgage approvals jump past forecasts in June
UK mortgage approvals rose past forecasts last month, alongside increasing consumer credit and a pick-up in the rate of growth of households' broad money holdings, pointing to continued economic growth ahead of the October Brexit deadline.
According to the Office of National Statistics, mortgage approvals for home purchase rose from 65,600 in May to 66,400 for June (consensus: 65,900).
Net consumer credit meanwhile increased by £1.0bn, which was slightly quicker than the pace seen over the previous six months, after rising by £0.8bn in May (consensus: £0.9bn).
In parallel, year-over-year growth in households' broad money holdings, know as M4, accelerated from the 3.5% clip observed in May to 3.6% for June, providing "reassurance that the economy isn’t grinding to a halt ahead of the October Brexit deadline, said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
"In real terms, broad money holdings are rising at the fastest pace since April 2017, thanks to low inflation and the boost to incomes from April’s increases in tax thresholds, public sector pay and the National Living Wage," he said.
As well, unsecured borrowing stabilised after the tighter conditions observed in 2018 which had led to a decline, he said, explaining that that decrease had subtracted half a percentage point from household spending.
The results of the Bank of England's Credit Conditions Survey also pointed to stable unsecured borrowing, with lenders no longer planning to reduce its supply for the first time since the end of 2017, while indicators were pointing to a recovery in homebuyer demand and a drop in mortgage rates, Tombs added.
So too, a £3.3bn rise in private non-financial companies' external borrowing suggested that corporates were not hunkering down ahead of a possible no-deal Brexit and that the downturn in capital expenditures was not intensifying.