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U.K. July Mortgage Approvals Fall to Five-Month Low, BBA Says

Aug. 24 (Bloomberg) -- U.K. mortgage approvals fell to a five-month low in July, the British Bankers’ Association said.

Home loans granted by lenders dropped 2.5 percent on the month to 33,698, the London-based group said in an e-mailed statement today. The reading is down 18.5 percent from a year earlier.

The Bank of England cut its growth forecast on Aug. 11 as the government prepared the biggest spending squeeze since World War II. Policy makers maintained emergency stimulus for the economy this month, noting that credit conditions “seemed set to remain somewhat tighter for longer,” according to minutes of the decision published last week.

“Demand for mortgages continues to be subdued,” David Dooks, statistics director at the BBA, said in the statement. “The greater availability of properties for sale and slowing house price growth have not yet fed through to increased house purchase approvals.”

The bank cut its forecast for growth to a peak of 3 percent from a projection of 3.6 percent in May. Policy makers kept the key interest rate at a record low of 0.5 percent and their bond-purchase program at 200 billion pounds ($308 billion).

To contact the reporter on this story: Jennifer Ryan in London at jryan13@bloomberg.net.

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net.

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