The number of home loans approved in Britain fell sharply in November to their lowest in almost a decade, official statistics showed today.
According to the Bank of England, mortgage approvals fell to 77,000 in November from a revised 85,000 in October, the lowest since September 1995.
Net mortgage lending in November was also down from £6.93 billion in October to £6.46 billion, the lowest since June 2002. Consumer credit rose just £1.38 billion compared with £1.51 billion in the prior month and well below the £1.6 billion that economists had predicted.
The figures are likely to support expectations in financial markets that policymakers will leave base interest rates unchanged at 4.75 percent for months to come.
"It looks like demand in the housing market has weakened and it's going to continue weakening," said George Buckley, economist at Deutsche Bank. "We don't think the BoE will raise rates in the near term and they probably should cut rates in the second half of this year."
There was little immediate reaction in short sterling interest rate futures while the pound fell slightly against the dollar as the figures were consistent with a recent stream of economic reports showing a cooling in the housing market.