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UK DATA: Consumer Credit Remains Subdued But Mortgage Approvals Firm

UK DATA
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BOE Money and Credit October data shows continued growth in loan approvals as mortgage rates continue to fall in anticipation of further BOE rate cuts, though consumer credit remains subdued.

  • Net consumer credit softened to GBP1.1bln, coming below expectations again (vs 1.3bln consensus, 1.2bln prior), driven by a fall in 'other forms of consumer credit' which includes car dealership finance and personal loans. This dampening in credit is likely due to the effective'' interest rate on new personal loans increasing 16bp to 8.85%.
  • Net mortgage approvals rose to 109,800 - remaining the highest since October 2022, with approvals for house purchases rising to 68,300 (vs 64,500 consensus). This is likely in part due to the 'effective' interest rate on newly drawn mortgages decreasing 15bp to 4.61% in October - the lowest since May 2023.
  • Money supply (M4 ex OFCs) growth meanwhile softened to 3.0% Y/Y, after seeing the highest annual reading since October 2022 with 3.5% in September. 
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BOE Money and Credit October data shows continued growth in loan approvals as mortgage rates continue to fall in anticipation of further BOE rate cuts, though consumer credit remains subdued.

  • Net consumer credit softened to GBP1.1bln, coming below expectations again (vs 1.3bln consensus, 1.2bln prior), driven by a fall in 'other forms of consumer credit' which includes car dealership finance and personal loans. This dampening in credit is likely due to the effective'' interest rate on new personal loans increasing 16bp to 8.85%.
  • Net mortgage approvals rose to 109,800 - remaining the highest since October 2022, with approvals for house purchases rising to 68,300 (vs 64,500 consensus). This is likely in part due to the 'effective' interest rate on newly drawn mortgages decreasing 15bp to 4.61% in October - the lowest since May 2023.
  • Money supply (M4 ex OFCs) growth meanwhile softened to 3.0% Y/Y, after seeing the highest annual reading since October 2022 with 3.5% in September.