UK lending slows on Brexit uncertainty

LONDON • UK lenders approved the fewest home loans in eight months in December and demand for unsecured debt remained subdued, Bank of England gures published yesterday show.

The slowdown reflects fears that Britain risks leaving the European Union without a deal, a scenario that could rock the property market and the economy. Consumer credit grew at its slowest annual pace in four years.

The number of mortgage approvals fell to 63,793 from 63,952 in November. Actual mortgage lending rose by £4.1 billion (RM21.73 billion). Consumer credit rose 6.6% from a year earlier, the weakest pace since December 2014 and down from growth rates above 10% in 2017.

Net unsecured lending of £687 million last month was the lowest since March and below £1 billion for a fourth month running. The average in the first eight months of 2018 was about £1.3 billion.

Concern about the economic outlook and tighter credit-scoring criteria by lenders are curbing the buildup of debt. Borrowing on credit cards rose just £92 million, the lowest figure since September 2014. Other loans rose by £596 million.

Lending to non-financial business rose £165 million, with borrowing by small firms offsetting repayments by larger ones. Non-resident investors bought a net £11.96 billion of UK government bonds following purchases of £2.42 billion in November.

No end to the uncertainty hanging over the economy is in sight, as Prime Minister Theresa May prepares to ask the EU to renegotiate the most contentious part of her Brexit deal. — Bloomberg