(Bloomberg) --
U.K. consumer borrowing posted the weakestgrowth in three years in August as the Bank of England raisedinterest rates to the highest since 2009.
Unsecured lending rose 8.1 percent from a year earlier, theleast since the same month in 2015, the U.K. central bank saidon Monday. It grew 1.1 billion pounds on the month.
The slowdown follows years of rapid expansion in whichfinancial-stability officials have expressed concern about therapid buildup of debt used to finance cars and other goods. TheBOE has nevertheless argued that the risks are confined to justa few areas, and that any future interest-rate hikes will belimited and gradual.
The rate hike in the summer also prompted homeowners tolock in lower borrowing costs. Remortgage approvals gained to53,125, the most since the previous BOE increase in November.
Borrowing on credit cards grew an annual 8.9 percent inAugust. Lending including vehicle finance, personal loans andoverdrafts rose by 7.7 percent, the least since 2014.
Separate figures showed a pickup in the mortgage market,with home-loan approvals rising to 66,440, the highest sinceJanuary.
Lending to non-financial firms rose 1.3 percent in August,but remained weak compared to the past two years. Growth inlending to small and medium-sized business remained close tozero for an eighth month.
Non-resident investors bought a net 14.5 billion pounds ofgilts, the most since November 2016, after purchases slumped inJuly.
©2018 Bloomberg L.P.
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