March 24, 2017 / 9:44 AM / a year ago

Mortgage approvals dip in February, consumer lending slows - BBA

LONDON (Reuters) - British banks approved the fewest mortgages in three months in February and consumer credit growth slowed slightly despite a jump in credit card borrowing, industry figures showed on Friday.

Workers walk to work during the morning rush hour in the financial district of Canary Wharf in London, Britain, January 26, 2017. REUTERS/Eddie Keogh -

Britain’s economy grew strongly last year, but rising inflation since June 2016’s Brexit vote means most economists expect consumer demand to weaken through this year, while house prices are predicted to rise more slowly.

Banks approved 42,613 mortgages for house purchase last month, down from 44,142 in January and 4.6 percent less than in February 2016, the British Bankers’ Association said.

“Elevated approval volumes for house purchases and re-mortgaging experienced during the winter months fell back in February, to average levels seen throughout most of last year,” said Eric Leenders, the BBA’s managing director for retail banking.

Annual consumer lending growth slowed to 6.6 percent from 6.7 percent, easing further from October’s 10-year high of 7.2 percent, despite a pick-up in net credit card lending to an 11-month high of 301 million pounds.

Lending to businesses, which is frequently volatile, dropped by 1.6 billion pounds last month after rising by 3.4 billion pounds in January.

“Businesses continue to exercise a cautious approach to borrowing, using cash reserves and alternative lending sources to finance their operations,” Leenders said.

The BBA data cover Barclays (BARC.L), HSBC (HSBA.L), Lloyds Banking Group (LLOY.L), RBS (RBS.L), Santander (SAN.MC), TSB (SABE.MC) and Virgin Money (VM.L), but not building societies, which account for a big chunk of mortgage lending.

More comprehensive data from the Bank of England will be released on March 29.

Reporting by David Milliken, editing by William Schomberg

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