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UK DATA: Loan Approvals Soften, Consumer Credit Remains Weak

UK DATA
CEEMEAData BulletBulletUKGlobalFixed Income BulletsForeign Exchange BulletsRegionMarkets

BOE November Money and Credit data indicates loan approvals were softer compared to October and consumer credit remains weak.

  • Net consumer credit was below expectations printing GBP0.9bln in Nov (vs GBP1.2bln consensus, GBP1.0bln revised prior), softening the annual growth rate to 6.6% Y/Y - the lowest since June 2022.
  • Net mortgage approvals for house purchases softened in November for the first time since May 2024 to 65,700 (vs 68,700 consensus, 68,100 revised prior), the biggest decline in M/M approvals since August 2023. This is despite the 'effective' interest rate on new mortgages falling 11bps to 4.50% in November.
  • Meanwhile, M4 money supply remained unchanged M/M (vs a fall of 0.2% in October). On an annual basis, M4 recorded growth of 2.9% Y/Y (vs 3.0% prior).
  • The chart below shows that mortgage approvals are beginning to stagnate whilst the differential between new mortgage rates and outstanding 5 year fixed rates continues to tighten.
  • Whilst in the last few months loan approvals were firm following the start of the rate cutting cycle, the anticipation of fewer, more gradual, rate cuts could prompt growth here to slow further.
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BOE November Money and Credit data indicates loan approvals were softer compared to October and consumer credit remains weak.

  • Net consumer credit was below expectations printing GBP0.9bln in Nov (vs GBP1.2bln consensus, GBP1.0bln revised prior), softening the annual growth rate to 6.6% Y/Y - the lowest since June 2022.
  • Net mortgage approvals for house purchases softened in November for the first time since May 2024 to 65,700 (vs 68,700 consensus, 68,100 revised prior), the biggest decline in M/M approvals since August 2023. This is despite the 'effective' interest rate on new mortgages falling 11bps to 4.50% in November.
  • Meanwhile, M4 money supply remained unchanged M/M (vs a fall of 0.2% in October). On an annual basis, M4 recorded growth of 2.9% Y/Y (vs 3.0% prior).
  • The chart below shows that mortgage approvals are beginning to stagnate whilst the differential between new mortgage rates and outstanding 5 year fixed rates continues to tighten.
  • Whilst in the last few months loan approvals were firm following the start of the rate cutting cycle, the anticipation of fewer, more gradual, rate cuts could prompt growth here to slow further.
image
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