British consumers increased their borrowing at the slowest pace in more than a year-and-a-half in May and banks offered fewer mortgages, data from the country’s banking industry showed yesterday, adding to signs of a slowdown in the economy.
Annual consumer lending growth slowed to 5.1% in May, down sharply from 6.4% in April and its weakest increase since October 2015, the British Bankers’ Association (BBA) said.
Banks approved 40,347 mortgages for house purchase last month, down from 40,686 in April and the smallest monthly number since September.
Eric Leenders, the BBA’s managing director for retail banking, said the numbers suggested UK consumers — who were already feeling the pinch from rising inflation and slowing wage growth — turned cautious ahead of the general election earlier this month.
“This month’s figures show in the run-up to the general election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending,” he said.
Weak business borrowing figures suggested companies were weighing up their options before raising finance to fund projects or developments, he added.
Meanwhile, Britain’s Brexit minister David Davis has said he is “pretty sure” he can negotiate a good deal to leave the EU, something that would require a transitional arrangement for around one or two years.
Mr Davis, who launched the Brexit talks with EU negotiator Michel Barnier last week, also threw his support behind Prime Minister Theresa May, saying he took his share of the blame for advising her to hold an early election this month in which her Conservatives lost their parliamentary majority.
Asked whether he was sure there would be a Brexit deal, Mr Davis told the BBC: “I am pretty sure, I am not 100% sure, it’s a negotiation ... You can be sure there’ll be a deal, [but] the deal I want is the free trade agreement, the customs agreement and so on.
“I said it will be turbulent, there will be difficulties, but at the end of the operation there is a point of common interest on both sides, where we gain by being able to exploit global markets, where they gain by having a friendly and comfortable ally, not an irritating member of the club.”
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