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- UK mortgage approvals edged up in July, but remained below the pre-pandemic average, data from the Bank of England showed on Tuesday.
Approvals for house purchases, an indicator of future borrowing, increased to 63,770 in July from 63,184 in June. However, both figures are below the 12-month pre-pandemic average up to February 2020 of 66,800.
July's slight uptick comes despite concerns the UK housing market will cool this year, with rampant consumer price inflation crimping household budgets and rising interest rates adding to borrowing costs. The BoE enacted its largest interest rate hike in 27 years earlier in August, lifting the benchmark rate by 50 basis points to 1.75%.
Net borrowing of mortgage debt decreased to £5.1 billion in July from £5.3 billion the month before, but was still above the pre-virus average of £4.3 billion.
‘The 'effective' interest rate the actual interest rate paid on newly drawn mortgages increased by 18 basis points to 2.33% in July and is the highest since June 2016,’ the BoE noted.
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