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UK mortgage approvals rise in June as consumer credit growth lifts

Net mortgage borrowing climbed to £7.7 billion in June, while annual consumer credit growth held at 9.1% and credit card growth rose to 12.5%.

Reported · Written up by our desk · EM Currencies

UK mortgage data showed a modest improvement in June, with net borrowing of mortgage debt by individuals rising to £7.7 billion, up from £3.3 billion in May, as mortgage approvals increased to 58,200.

Forexlive reports that approvals were still below the running six month average of about 61,400, and remortgaging approvals rose to 34,200 from 33,800. It also said net consumer credit borrowing edged up to £1.8 billion, broadly in line with the average over the past six months.

The breakdown indicated credit card borrowing at £0.9 billion, with other consumer credit also at £0.9 billion in June. Looking at the annual rate, consumer credit growth was 9.1%, slightly higher than 9.0% in May, while the annual growth rate for credit card borrowing increased further to 12.5%.

Forexlive links the stronger consumer borrowing, including faster credit card growth, to possible household financial strain rather than broad economic strength, citing the UK cost of living pressure. It also pointed to a Bank of England survey showing lenders reporting rising credit default rates outnumbered those reporting declines by 34%, the highest reading since 2009.

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