UK’s mortgage approvals and consumer spending defy Brexit pressures

In what is typically British, consumers have thrown Brexit-related caution to the wind and have upped their risk appetite. Here’s a snapshot of data coming out of the Bank of England.

On Friday, data from the Britain’s central bank showed, British households took out more mortgages and increased their borrowing in January despite Brexit related stresses and anxieties.

Consumer borrowings have also picked up by nearly 1.1 billion pounds.

The annual growth rate in unsecured consumer lending however has reduced to 6.5% – its weakest pace in more than four years, showed data from the Bank of England.

As expected, the British economy has slowed down sharply ahead of Brexit. Britain is scheduled to leave the European Union on March 29 this month. Earlier this week, Prime Minister Theresa May has opened the possibility of extending the departure thus prolonging the uncertainty.

Although the country’s manufacturing sector has slowed down in February, consumer spending showed no signs of nervousness.

In a positive development, earlier this week, data from Britain’s banking industry showed the highest number of mortgage being approved in January since September 2017, thus hinting at a stabilization in the weak housing market; consumer credit has also grown at its fastest pace in nearly a year.

Data released by the BoE on Friday showed, net mortgage lending slowing down to 3.660 billion pounds in January – a sharper than expected loss in growth momentum than expected by economists.

Another significant point to be noted is that, net gilt holdings by foreign investors have also fallen by 9.545 billion pounds in January, down from 11.960 billion pounds in December 2018.

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