Most of the action coming from the UK today was in the equity markets. The only economic data that came out were BBA mortgage approval figures which revealed a 3 percent decline between April and May, which means there has been a 17 percent decrease over the past year. The number is slightly higher on a seasonally adjusted basis, but remains below the 6-month average growth rate. On a broader horizon, the level of debt still remains quite high, which may have prompted today’s warning contained in the Bank of England’s Financial Stability Review to the dangers of indebtedness. With household
debts currently adding up to over GBP1 trillion and elevated debt levels seen in company balance sheets, an economic downturn can lead to a great number of personal and corporate bankruptcies. Although lending growth is decelerating, this could be from more discerning lenders as opposed to lower demand for borrowed funds.
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