UK mortgage approvals rise for first time in four months, consumer lending falls

LONDON, (Reuters) – – The number of mortgages approved by British banks increased for the first time in four months during January, industry data showed on Monday, but lending to consumers fell, reflecting caution among households.

Mortgage approvals rose to 40,117 from 36,085 in December, industry association UK Finance said.

Consumer credit declined by 0.2 percent in annual terms in January – the first drop since UK Finance’s new consumer credit series started in April 2017.

British households have been hit by a squeeze in their spending power after the 2016 Brexit vote pushed up inflation.

Net credit card lending amounted to just 4 million pounds last month, down from 86 million in December and marking the weakest increase since April 2016.

Eric Leenders, managing director of personal finance at UK Finance, said:

“January saw higher levels of repayments on credit cards, which is expected at this time of year as customers pay off their festive spending.”

UK Finance said investment levels were broadly unchanged as companies adopted a “wait and see” attitude to uncertainty around trading.

Official data last week showed business investment was stagnant in the last three months of 2017. Businesses have said they are reluctant to invest before knowing how the result of Britain’s talks to leave the European Union will pan out.

Kindly shared by Reuters UK