"The bank would be vigilant about signs of acceleration and greater exuberance in lending practices...We're now the supervisor of the banks and building societies so we could tighten that supervision."
- Mark Carney, Bank of England Governor
Amid concerns over a growing housing bubble in the U.K., Monday's report from the British Bankers' Association showed unexpected data, saying mortgage approvals fell last month. The number of mortgage approvals in one of the fastest growing economies in the world slowed to 42,808 in October, from an upwardly revised 43,182 and short of analysts' expectations of a 45,200 number. While these figures may ease concerns about overheating property market, the number of loans soared 33% from the same month a year earlier, supporting the case the government would have to reconsider its programmes like Help-to-Buy. Assistance schemes are definitely working and helping first-time buyers as housing market activity rises; however, a shortage of supply is fuelling prices, that may lead to a potential disaster for a whole economy.
The U.K. Pound eased back from its one-month high against the U.S. Dollar, amid disappointing mortgage approvals data. The cable hit the lowest since Thursday, moving back to 1.6132. Nevertheless, despite unstable housing market, Mark Carney pledged to watch price movements closely. He also stressed out the BoE will be able to use tools with respect to affordability tests on mortgages and capitals in case it is needed.
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