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UK mortgage approvals jump as housing market bounces back

LONDON (Reuters) - British mortgage lending accelerated in July, a latest sign of a post-lockdown bounce-back in the housing market, and consumers returned to borrowing, data from the Bank of England showed on Tuesday.

FILE PHOTO: A worker wearing a protective face mask walks past the Bank of England in the City of London, Britain, August 6, 2020. REUTERS/Toby Melville

Mortgage approvals jumped to 66,300 from just under 40,000 in June and seven times higher than their coronavirus pandemic low of barely more than 9,000 in May, the data showed.

Economists polled by Reuters had expected about 55,000 approvals in July.

“Overall, these figures support other evidence that the economy continued to recover in July,” Andrew Wishart, an economist with Capital Economics, said.

“But we still think that the realisation of more job losses after the furlough scheme started to be wound up in August will cause the recovery to slow.”

Finance minister Rishi Sunak cut a duty on house purchase for many buyers in July as part of his emergency measures to spark the housing market and the broader economy which shrank by a record 20.4% in the April-June period.

However, the approvals figure remained below its level of nearly 74,000 in February.

Similarly, the amount of mortgage lending in July rose by a net 2.7 billion pounds, up from 2.4 billion in June but still a long way below an average of 4.2 billion pounds in the six months before the lockdown.

Consumer borrowing picked up, increasing by 1.2 billion pounds in July after four months of net repayments, slightly above the average borrowing before the lockdown.

But lending on credit cards remained down about 10% from a year earlier.

Separately on Tuesday, a survey confirmed that British factory output recovered some ground in August when output rose at the fastest pace in more than six years, but the improvement was from low levels.

Reporting by William Schomberg and Andy Bruce

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