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UK lending to individuals and mortgage approvals stronger than expected in June

Wed, 29th Jul 2020 10:41

(Sharecast News) - Lending to individuals began to bounce back in June alongside a stronger than expected pace of mortgage approvals.

According to the Bank of England, lending to individuals grew at a month-on-month pace of 1.8% (consensus: -1.5%) to reach £1,674.2bn, outpacing economists' forecasts for a drop of 1.5%.

That followed a drop of 7.3% in April and of 3.3% in May.

Withing that amount, consumer credit edged lower by 0.1% to £207.1m as credit card lending down 0.2% at £61.6bn.

Lending secured on dwellings meanwhile edged up by 0.1% or £1.9bn against May (consensus: £1.5bn) to reach £1,467.1bn.

In parallel, 40,010 mortgages for home purchases were approved (consensus: 31,000), for a jump of £8.3bn to £15.7bn.

Corporates meanwhile raised £10.7bn in net finance over the month, a volume which remained far beneath the £31.9 observed in March, with the bulk of that - to the tune of £6.3bn - obtained from monetary financial institutions.

Small and medium-sized non-financial enterprises obtained £10.2bn-worth of loans, while lending to large firms shrank by -£16.7bn, which itself was on top of a -£13.0bn drop in May.

Construction and real estate firms registered the biggest increases in lending among SMEs.

Total loans to non-financial companies thus fell by -£6.5bn following a rise of £5.0bn in the month before.

On the opposite of the ledger, the month-on-month rate of growth in so-called broad money, or M4, slowed from 2.3% to 0.7%.

Yet on a 12-month view, M4 was running at 11.9%, up from 11.2% in May and 7.5% for March.



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