UK Mortgage approval rates halt Pound’s advance
The two days gains shown by the Pound have been halted, as figures show that mortgage approval rates dipped to their lowest rate in nine months during April.
The approval rate dropped as a result of the tightening of lending rules used by the banks.
Banks have been tightening the rules that they apply to mortgage lenders for several months.
In April, new rules demand that borrowers show they will be able to afford repayments even if the interest rate rises.
While the decline in mortgages has hit the Pound’s ascent, it may have helped to quell fears surrounding the property market.
Officials were set to meet to discuss what actions, if any, needed to be taken to prevent the property growth from becoming more of a problem.
The actual number of mortgage approvals dropped from 66,563 in March to 62,918 in April. This was the third month of decline ,and figures released today also show that business lending fell by £2.4bn in the month of April.
While the news has halted the Pound’s surge, analysts and experts believe that it is only a temporary stutter, and point to a robust economic recovery as the principle reason that the Pound will rise again. They believe that online Forex trading, and currency plays, will see the value of the Pound rise further in coming days.
The Pound had been buoyed earlier by the news that UK manufacturing PMI was 57 in May, matching estimated figures. Manufacturing PMI has only limited implications on monetary policy, and therefore only a short term effect on online Forex trading. PMI is calculated by Markit Economics, who surveyed purchasing managers. The level of 57 signified a slight drop from the 57.3 in April, but still remains above the 50, which represents growth.
