U.K. Mortgage Approvals Unexpectedly Fall From 14-Month High

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U.K. mortgage approvals unexpectedly fell in May following a surge in April to their highest level in more than a year.

Approvals dropped to 64,434 from a downwardly revised 67,580, the Bank of England said in London Monday. Economists had forecast a figure of 68,800, according to a Bloomberg survey.

Recent surveys suggest record-low borrowing costs and improving household finances are reasserting themselves in the housing market, while the pressure on prices is being exacerbated by a continuing shortage of property for sale.

The BOE said net mortgage lending -- gross loans less repayments -- was 2.1 billion pounds ($3.3 billion) in May compared with 1.7 billion pounds the previous month. Net consumer credit totaled 1 billion pounds. The effective interest rate on new mortgages fell 5 basis points to 2.59 percent. The rate on outstanding secured loans dipped 1 basis point to 3.11 percent.

The pound was little changed after the data and was trading at $1.5701 as of 9:33 a.m. London time, down 0.3 percent on the day.

M4, a broad measure of money supply, rose 0.5 percent from the previous month and was 0.7 percent higher than a year earlier. An underlying measure of M4 -- excluding so-called intermediate and other financial corporations -- increased 4.5 percent on a three-month annualized basis.

Non-residents bought a net 8.45 billion pounds of gilts in May. It followed net purchases of 6.12 billion pounds in April and 14.8 billion pounds in March.

Lending to non-financial businesses rose by 700 million pounds in May, the BOE said. Within that, loans to small and medium-sized enterprises climbed 100 million pounds.

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