U.K. Mortgage Approvals Top Forecasts, Consumer Credit Falters
Mortgage approvals in the U.K. slipped to 52.3K in August from a revised reading of 52.4K in the previous month, which topped expectations for a rise to 51.5K, while secured lending for homes increased GBP 1.0B after falling GBP 0.2B in the previous month. At the same time, consumer credit fell for the second month as households repaid GBP 0.3B in debt, which is the most since April 1993, and the data foreshadows a dour outlook for private-sector spending as individuals face a weakening labor market paired with tightening credit standards. Nevertheless, as the Bank of England holds borrowing costs at the record-low and commits GBP 127B in asset purchases to shore up the ailing economy, the extraordinary efforts taken on by the government should help to stem the downside risks for growth and inflation as policy makers see the nation emerging from the worst recession since the post-war period.
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