Britons tighten belts as lending growth nears five-year low: Bank of England

Lending to British consumers grew in April at the weakest annual rate in nearly five years, a sign households have tightened belts ahead of Brexit, Bank of England data showed on Friday.

The annual growth rate in unsecured consumer lending eased to 5.9% from 6.4% in March, marking the smallest increase June 2014, the figures showed.

Spending by Britain’s consumers has helped soften a slowdown in the overall economy, thanks to a combination of low unemployment, rising wages and modest inflation.

By contrast, employers have displayed more concern and they cut back on investment throughout 2018. The housing market also slowed sharply but there have been tentative signs it may be past the worst of its lull.

The BoE said the number of mortgages approved for house purchase rose to 66 261 in April from 62 559 in March, compared with a median forecast of 63 250 in a Reuters poll of economists.

The data chimed with figures published earlier this week by UK Finance, an industry group, which reported the number of mortgage approvals rose to the highest level since February 2017 last month.

Still, earlier on Friday mortgage lender Nationwide said annual house price growth cooled in May, against the expectations of economists in the Reuters poll.

The BoE data showed net mortgage lending, which tends to lag behind approvals, increased by 4.290 billion pounds in April, compared with 4.369 billion pounds in March.

The figures for April alone showed a 0.942 billion-pound increase in unsecured lending, a little weaker than the Reuters poll forecast for a 0.978 billion-pound rise.