Hamilton Crawford: UK Home Loan Approvals Drop
Hamilton Crawford: As the Bank of England gets ready to lift interest rates, the number of mortgages approved drops to 3-month low
SHANGHAI, November 6, 2017 (Newswire.com) - According to lending figures recently released by the Bank of England, the U.K. consumer economy and property sector maintained the majority of their growth last month which left the central bank on course to increase interest rates for the first time in more than 10 years.
The volume of home loans approved for property purchase dropped to a three-month low in September.
The growth rate in unsecured consumer lending in September matched July’s growth but slipped down to 9.9 percent from 10.0 percent in August.
According to economists at Shanghai, China-based Hamilton Crawford, net consumer lending increased by £1.606 billion in September, slightly above the highest predictions.
In September, the BoE stated that U.K. banks were required to have an additional 10 billion pounds of capital to safeguard against bad loans out of concern that lenders had overestimated the borrowing capacity of their customers.
Last week’s official government data revealed that personal insolvencies increased to a five-year high in the third quarter of 2017.
Although gross domestic product growth was still considerably below its recent long-run trend, government data also showed an unexpected upswing in gross domestic product growth to a quarterly rate of 0.4 percent in the third quarter after its weakest first two quarters in five years.
With joblessness at its lowest in more than four decades and inflation sitting at a five-year high of 3.0 percent, it seems highly likely that the BoE will raise interest rates this week in order to reverse the rate cut that was made after Britons voted to leave the European Union in 2016.
Hamilton Crawford economists believe that a rate hike may not initially be felt by most Britons, with fewer than 30 percent of homes having home loans and 60 percent of those being fixed-rate loans.
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Source: Hamilton Crawford