UK Money and Credit

UK bank lending and mortgage approvals remained surprisingly strong in April despite rising rates. Berenberg expects a cooling effect with a lag, potentially allowing the BoE to avoid further interest rate hikes.

Key Takeaways

• 1.UK bank lending and mortgage growth remained unexpectedly robust in April despite rising interest rates linked to geopolitical tensions.
• 2.The surge in mortgage approvals to a 15-month high is likely a 'rush' effect before higher rates are fully applied to new loans.
• 3.While headline data is strong, tentative signs of cooling in corporate credit and significant household ISA transfers suggest demand may soon ease.

Table of Contents

• Berenberg Macro View
• Drop in mortgage approvals still to come
• Some signs of household restraint
• Tentative signs of a turning point in corporate borrowing
• Disclaimer
• Remarks regarding foreign investors
• United Kingdom
• United States of America
• Copyright

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