British Pound Climbs Against Euro as UK Mortgage Approvals Increase

The British pound appreciated against the euro on Tuesday, after a report that was published by the Bank of England earlier today showed that UK mortgage approvals rose for the second month in a row in October.

The report said that official data display an increase in mortgage approvals to 67,518 in October, which is the highest level since March. The number brings mortgage approvals back to their pre-Brexit level, which means that the housing market is showing strength even after British voters decided that the nation will leave the European Union in a referendum in June.

The rise in October surpasses September’s increase to 63,594 and August’s increase to 61,381. It also comes in line with estimates published by the British Bankers’ Association last week, which also predicted a strong climb in annual growth rate of consumer credit. Nonetheless, the data does not include any surprising changes so it will have little effect on the monetary policy of the Bank of England.

The British pound was the only major currency to outperform the US dollar in the current month. However, the economy of the UK is expected to slowdown in 2017, which will grab the British currency lower as household incomes and consumer spending suffer from the negative effect of the pound’s 16% decline since June’s referendum.

EUR/GBP traded at 0.8511 as of 19:34 GMT today after touching 0.8469 at 14:05 GMT, the pair’s highest level since November 25. Trading opened on EUR/GBP today at 0.8542.

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