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UK mortgage approvals and consumer credit jump despite higher rates

UK mortgage approvals rose unexpectedly in June, despite further increases in interest rates.

Bank of England statistics showed net mortgage approvals for house purchases rose to 54,700 from 51,100 the previous month, while approvals for remortgaging rose to 39,100 from 34,100.

Analysts had expected the housing market to slow in a month when stubbornly high inflation figures led the central bank to raise interest rates sharply to 5 per cent — the highest level in 15 years — leading lenders to temporarily pull mortgage deals from the market while they repriced them.

The BoE said the “effective” interest rate — the actual interest rate paid — on newly drawn mortgages rose by a further 7 basis points to 4.63 per cent in June. The effective rate on the outstanding stock of mortgages rose 10 basis points to 2.92 per cent. 

This is a developing story.

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