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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.
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