U.K. Households Rein In Borrowing as Brexit Deadline Nears

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U.K. demand for borrowing declined last month as households braced for Brexit, Bank of England figures published Monday show.

Mortgage approvals fell from an 18-month high in August, consumer credit growth was the weakest in more than five years, and credit-card borrowing showed the smallest gain this year.

Key Insights

• Mortgage approvals fell to 65,545 from a revised 67,011 in July. Actual mortgage lending weakened to 3.9 billion ($4.8 billion) pounds, in line with the average since 2016
• Consumer credit rose 5.4% from a year earlier, the weakest pace since 2014 and down from growth rates above 10% in 2016
• Net unsecured lending was 0.9 billion pounds, below the average of the past year
• Borrowing on credit cards weakened to 200 million pounds, the lowest since December. Other loans were little changed at 0.7 billion
• Lending to non-financial business rose 2.4 billion pounds, after a month of net repayments in July. Borrowing among large businesses increased slightly, while smaller firms increased debt at a slower pace

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• Non-resident investors bought 7.2 billion pounds of U.K. government bonds following net sales of 2.9 billion pounds in July

To contact the reporter on this story: David Goodman in London at dgoodman28@bloomberg.net

To contact the editors responsible for this story: Fergal O'Brien at fobrien@bloomberg.net, Brian Swint

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