The UK mortgage approvals declined to one-year low in July following the initial tapering off of the stamp duty holiday, figures from the Bank of England showed on Tuesday.

Approvals for house purchases, an indicator of future borrowing, decreased further in July to 75,152 from 80,272 in June. This was the lowest since July 2020, but remained above pre-February 2020 levels. The expected level was 78,600.

Timely indicators suggest that demand will be resilient even when the tax break ends altogether in October, although a lack of stock for sale could constrain sales volumes, Andrew Wishart, an economist at Capital Economics, said.

Individuals repaid GBP 1.36 billion of mortgage debt in July, following a record borrowing of GBP 17.7 billion in June. Gross lending fell to its lowest since June 2020, at GBP 16.5 billion.

Further, data showed that individuals borrowed no additional consumer credit in July. The annual growth rate for all consumer credit remained weak, decreasing slightly to -2.7 percent in July from -2.2 percent in June.

Non-financial businesses borrowed GBP 3.7 billion from banks in July, an increase from GBP 1.5 billion in June. The annual growth rate of borrowing by all large businesses remained weak, at -3.1 percent.

The net repayment by SMEs of GBP 1.2 billion was the largest on record, and follows average net borrowing of GBP 2.7 billion per month since March 2020.

M4 money supply grew 0.1 percent on month in July and advanced 6 percent from the same period last year.

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