By Jason Douglas and Nicholas Winning
LONDON--The number of mortgage approvals in the U.K. fell in February and lending to businesses shrank, Bank of England data showed Tuesday, underscoring an ongoing credit squeeze.
The central bank said there were 51,653 new home loans approved in February, down from 54,187 a month earlier. Analysts were expecting 54,300 mortgages to be approved.
Mortgage lending rose by 866 million pounds ($1.3 billion) and overall consumer lending rose GBP1.5 billion, as Britons took out unsecured loans and borrowed on credit cards.
Lending to non-financial businesses and the public sector, net of repayments, shrank by GBP2.2 billion in February, the BOE said. However, net lending to small and midsize firms rose by GBP100 million, the first rise in small-business lending since June 2012.
Policy makers have identified weak lending as a key factor holding back economic recovery in the U.K. The BOE in the summer launched a program designed to boost the credit supply by channeling funds to banks that make more loans, while Chancellor of the Exchequer George Osborne on March 20 announced a range of measures aimed at reviving a moribund housing market.
BOE data on Tuesday also showed the U.K. money supply, excluding money moving around within the financial system, shrank 0.3% on the month in February and expanded 4.9% on an annualized basis.
Write to Jason Douglas at jason.douglas@dowjones.com and Nicholas Winning at nick.winning@dowjones.com
LONDON--The number of mortgage approvals in the U.K. fell in February and lending to businesses shrank, Bank of England data showed Tuesday, underscoring an ongoing credit squeeze.
The central bank said there were 51,653 new home loans approved in February, down from 54,187 a month earlier. Analysts were expecting 54,300 mortgages to be approved.
Mortgage lending rose by 866 million pounds ($1.3 billion) and overall consumer lending rose GBP1.5 billion, as Britons took out unsecured loans and borrowed on credit cards.
Lending to non-financial businesses and the public sector, net of repayments, shrank by GBP2.2 billion in February, the BOE said. However, net lending to small and midsize firms rose by GBP100 million, the first rise in small-business lending since June 2012.
Policy makers have identified weak lending as a key factor holding back economic recovery in the U.K. The BOE in the summer launched a program designed to boost the credit supply by channeling funds to banks that make more loans, while Chancellor of the Exchequer George Osborne on March 20 announced a range of measures aimed at reviving a moribund housing market.
BOE data on Tuesday also showed the U.K. money supply, excluding money moving around within the financial system, shrank 0.3% on the month in February and expanded 4.9% on an annualized basis.
Write to Jason Douglas at jason.douglas@dowjones.com and Nicholas Winning at nick.winning@dowjones.com
