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UK Mortgage Approvals Fall In February

UK mortgage approvals declined in February and consumer credit growth slowed from January, the Bank of England reported Wednesday.

The number of loans approved for house purchases fell to 68,315 in February from 69,114 in January. Approvals were forecast to remain at 69,100.

The dip in mortgage approvals fuels the belief that the housing market will come under increasing pressure over the coming months, IHS Markit Economist Howard Archer, said.

Markedly weakening consumer fundamentals, likely mounting caution over making major spending decisions, and elevated house price to earnings ratios are likely to weigh down on housing market activity and house prices, the economist added.

However, a shortage of supply is likely to put a floor under prices, Archer said.

Lending to individuals climbed GBP 4.9 billion in February after rising GBP 4.8 billion, data showed.

Within total lending, secured lending increased at a faster pace of GBP 3.5 billion compared to January's GBP 3.2 billion rise. Secured lending growth came in line with expectations.

Meanwhile, consumer credit rose at a slower pace of GBP 1.4 billion, following a GBP 1.6 billion increase in January. Economists had forecast an increase of GBP 1.3 billion.

The annual growth in the monetary aggregate M4 eased to 5.7 percent in February from 7 percent in January. Month-on-month, M4 fell 0.3 percent.

by RTT Staff Writer

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