May 1, 2019 / 8:33 AM / 3 months ago

Brexit deadline in March hit UK lending, BoE data shows

FILE PHOTO: A man walks past the Bank of England in the City of London, Britain, February 7, 2019. REUTERS/Hannah McKay/File Photo

(Reuters) - British lenders approved the fewest mortgages in March since December 2017 and consumer borrowing slowed sharply in the run-up to the original Brexit deadline, Bank of England data showed on Wednesday.

Lenders approved 62,341 mortgages, down from 65,340 in February and less than all forecasts in a Reuters poll of economists that had pointed to a figure of 64,850.

In cash terms, consumer credit increased by a net 549 million pounds in March, the smallest rise since November 2013 and following a 1.229 billion pound increase in February.

The figures hinted at fresh weakness emerging in consumer spending, which has until now helped to offset sharp declines in business investment in the run-up to the Brexit vote.

Annual growth in consumer credit slowed to 6.4 percent in March from 6.5 percent, marking the weakest growth since October 2014, the BoE said.

Britain’s housing market weakened in 2018 and is still struggling for momentum. Earlier on Wednesday mortgage lender Nationwide said house prices rose by more than expected in April, but were still up only 0.9 percent on the year.

The BoE data showed net mortgage lending, which tends to lag behind approvals, rose to 4.120 billion pounds in March, up from 3.314 billion pounds in February.

The BoE’s mortgage approvals data contrasted with figures published last week by UK Finance, an industry group, which reported the number of mortgage approvals hit a nine-month high in March.

Reporting by Andy Bruce and William Schomberg

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