FILE PHOTO: High-rise apartments under construction can be seen in the distance behind a row of residential housing in south London, Britain, August 6, 2021. REUTERS/Henry Nicholls
August 31, 2021
LONDON (Reuters) -British consumers curbed their borrowing in July when the country was hit by a rise in COVID-19 cases which triggered tough self-isolation rules, and homeowners made a rare net repayment on their mortgages, Bank of England data showed.
Consumer borrowing dipped by 42 million pounds ($57.8 million) in July, the weakest performance since February this year when the country was in the grip of a third coronavirus lockdown.
The fall compared with a median forecast for an increase of 441 million pounds in a Reuters poll of economists.
There have been other signs of a dip in economic activity in July when many firms were facing staff shortages aggravated by the spread of the Delta variant of coronavirus and strict self-isolation rules which have since been relaxed.
The BoE data published on Tuesday also showed net mortgage repayment stood at 1.4 billion pounds in July, only the second time in the past decade that repayments have been bigger than borrowing after an unprecedented 17.7 billion of net borrowing the previous month.
June’s leap was fuelled by the tax incentive for buyers which was part of finance minister Rishi Sunak’s package of emergency measures to support Britain’s economy through the coronavirus pandemic.
Nonetheless, the Reuters poll of economists had pointed to slower but continued growth in mortgage borrowing of 3.1 billion pounds in July.
Under the tax incentive scheme, the first 500,000 pounds of any property purchase in England or Northern Ireland were exempt from stamp duty until the end of June. Similar measures were offered in Scotland and Wales.
A 250,000 pound tax-free allowance is now running until the end of September in England and Northern Ireland.
The BoE said British lenders approved 75,152 mortgages in July, the lowest in a year.
A Reuters poll of economists had pointed to 78,600 approvals.
($1 = 0.7260 pounds)
(Reporting by William Schomberg, editing by Andy Bruce)
Source: One America News Network
