New record low for mortgage approvals

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New data from the Bank of England shows mortgage approvals falling to 73,000 last month - down from a (downwardly) revised 81,000 in November. It's the seventh straight monthly decline and the lowest since the Bank first started compiling the data. It's also significantly lower than the 79,000 approvals analysts had pencilled in.

Elsewhere, the increase in net consumer credit (£0.6 billion) was below that in November and below the previous six-month average. Net credit card lending rose by £0.3 billion, slightly below the increase in November. Net other loans and advances also rose by £0.3 billion, £0.6 billion lower than the November increase. Meanwhile, the annual and three-month annualised growth rates of consumer credit fell by 0.3 percentage points to 5.7% and 1.6 percentage points to 6.3% respectively.

The latest data merely confirms what was already known, namely that the housing market is slowing down. It will also add to the clamour for the Bank of England to cut interest rates again next week. A 0.25% cut has already been factored in by the markets, as have three subsequent reductions before the end of the year.

The big question though is whether the latest numbers will be enough for the Bank to make those cuts within an even shorter timeframe - assuming future data backs these latest numbers up.

Moneyextra.com