British consumers are feeling the pinch after five interest rate rises in less than a year, with a slowdown in the rampant housing market, ebbing consumer morale and a drop in retail sales, data showed today.
Financial markets have been reassessing how much further British interest rates will rise to prevent the economy from generating inflation and the figures offered more support for the view that rates may not have to rise much more, if at all.
Bank of England data showed British mortgage lending in August rose at its slowest pace in a year at just under 8.4 billion pounds while the number of new loans for house purchase fell to its lowest level in nearly four years at 96,000.
Consumer confidence dipped this month to its lowest in a year and half as consumer morale took a hit from growing signs the housing market has finally turned, a GFK Martin Hamblin survey showed.
There was more evidence that caution is creeping into the consumer sector from the CBI, which released a report showing retail sales fell unexpectedly in September to give their weakest performance in 1-1/2 years, a result which could not be blamed on bad weather.