MNI POLICY: BOE Data Show Mortgage Interest Rates At New Lows>

     By David Robinson and Irene Prihoda

     LONDON (MNI) - Bank of England money and credit data showed that 

the average interest rates being paid by borrowers on a range of 

mortgages were at record lows in February, but housing market activity 

looks set to soften.

     The following are key points from the BOE data sets:

     -The number of mortgage approvals, a reliable indicator of future 

house purchases, fell to 64,337 in February from 66,696 in January, just 

above the 64,112 recorded in December.

     The approvals figure was a shade below the previous six month 

average of 65,50. Other housing market surveys have also painted a 

picture of subdued demand.

    -The average interest rate on the stock fixed 3,4 and 5 year 

mortgages hit their series lows in February. The average interest rate 

on the stock of all fixed rate mortgages was unchanged at 2.23%, the 

joint lowest on record.

     Despite the Bank of England having raised its policy rate from its 

trough, the actual interest rates being paid by mortgagees have 

declined, reflecting a mix of squeezed net interest margins and flatter 

money market curves.

    -Unsecured borrowing was little changed in February 1,145 compared 

to January. The yearly growth rate of consumer credit (Feb 6.3%) 

continued to show a downward trend which has been in place since 

November 2016 where it peaked at 10.9%. 

     As consumer confidence remains weak and as this data show borrowing 

decelerating then consumption grwoth is likely to be subdued.  

 -London newsroom: e-mail: david.robinson@marketnews.com  

[TOPICS: M$B$$$,M$$BE$,MABDS$]