Mortgage approvals for house purchases saw a slight increase in July, marking the third consecutive month of growth, according to official data.
The Bank of England's money and credit statistics indicate that the housing market remains robust despite concerns of a potential downturn ahead of the Autumn Budget, as reported by .
This uptick in approvals occurred even as net borrowing of mortgage debt fell by £900m, following a £3.2bn surge in the previous month.
Large businesses witnessed an increase in their annual borrowing growth rate from 5.7 per cent to eight per cent.
Meanwhile, the borrowing growth rate for small and medium-sized enterprises (SMEs) rose from 0.3 per cent to 0.9 per cent, reaching its highest level since August 2021.
Paul Dales, chief º£½ÇÊÓƵ economist at Capital Economics, suggested that recent lending data indicates that interest rate cuts over the past year have not stimulated the º£½ÇÊÓƵ economy, while looming tax threats may be prompting households to save more.
"Mortgage rates have not fallen as far as Bank Rate over the past year, which is holding back housing activity," stated Dales.
He further speculated that the anticipation of tax increases in the upcoming Budget might also be curbing activity in the housing market and the broader economy.
"These figures broadly support our view that the economy will grow at a subdued pace over the second half of this year, with possible tax rises in the Budget being an extra downside risk."
Mortgages boost keeps housing market afloat
Newly released data has revealed that households saved an additional £7.3bn in July.
º£½ÇÊÓƵ residents deposited £4.3bn into standard savings accounts and a further £2.7bn into ISAs during the month.
The effective interest rate on individual savings with banks and building societies stood at 3.84 per cent in July, decreasing at a slightly slower rate than the Bank of England's interest rate cuts.
Consumer credit borrowing saw a slight increase to £1.6bn from £1.5bn in the previous month, according to the data.
"Overall, today's money and credit data give a tentative sign of consumer spending picking up a little, and of business sentiment improving," commented Thomas Pugh, chief economist of consultancy firm RSM º£½ÇÊÓƵ.
"At the margin, that probably further decreases the chances of another interest rate cut this year, but the inflation and labour market data remain key."
