British Pound Appreciates on Mortgage Approvals Growth

The British pound was pushed higher against the US dollar today after data released on Thursday revealed an increase in the United Kingdom’s mortgage approvals.

The British Bankers’ Association, a trade association that represents UK banking and financial services sector, said in a report earlier today that mortgage approvals for house purchases rose for the second month in a row last October. Mortgage approvals increased by 40,851 in October, surpassing an estimated increase by 39,000 and a gain by 38,690 in September.

On a year-to-date basis, October’s increase in mortgage approvals is 10% less than the approval level of October 2015. Nonetheless, the data reflects the resilience that the British economic growth is displaying, even after June’s Brexit referendum.

Consumer credit growth is now higher than 7%, which is the most powerful growth rate since November 2006, according to the same report by the British Bankers’ Association. The improved credit growth is attributed to stronger retail sales growth in October, which showed a solid consumer confidence.

The Bank of England is due to release its lending data next Tuesday. However, the BBA’s own data revealed that net credit card lending rose by 220 million British pound in October, compared to 179 million pounds in September.

GBP/USD touched 1.2446 as of 22:32 GMT on Thursday after rising to 1.2493 at 11:05 GMT today, the highest level in two days. The pair started trading today at 1.2433.

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