Figures from Bank of England reflect impact of high interest rates on lending and come days before policymakers’ vote
UK mortgage approvals sank in September to the lowest since January 2023 while money supply contracted further, according to official data that reflects the impact of high interest rates on lending days before the Bank of England decides whether to raise them.
The figures come as the average rate on new mortgages rose above 5 per cent for the first time since 2008, following the sharp increase in interest rates from an all-time low of 0.1 per cent in November 2021 to 5.25 per cent now. Markets widely expect the central bank’s Monetary Policy Committee to leave interest rates unchanged at 5.25 per cent – the highest level since the 2008-09 financial crisis – as data increasingly points to signs of weakness in economic activity and softening price pressures.
The central bank’s data also showed softening consumer borrowing, which fell to £1.4 billion in September from £1.7 billion in August, suggesting some households are cutting spending.