LONDON (Reuters) - British consumers increased their borrowing at the slowest pace in more than a year-and-a-half in May and banks offered fewer mortgages, data from the country’s banking industry showed on Monday, adding to signs of a slowdown in the economy.
Annual consumer lending growth slowed to 5.1 percent in May, down sharply from 6.4 percent in April and its weakest increase since October 2015, the British Bankers’ Association said.
Banks approved 40,347 mortgages for house purchase last month, down from 40,686 in April and the smallest monthly number since September.
Eric Leenders, the BBA’s managing director for retail banking, said the numbers suggested consumers - who were already feeling the pinch from rising inflation and slowing wage growth - turned cautious ahead of a national election on June 8.
“This month’s figures show that in the run-up to the general election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending,” he said.
Weak business borrowing figures suggested companies were weighing up their options before raising finance to fund projects or developments, he added.
Reporting by William Schomberg, editing by David Milliken