UK consumer lending grows at fastest pace since 1993 as mortgage approvals slump

Net unsecured lending to UK consumers rose by £2.464 billion ($3.26 billion) in August, well above economists’ £1.9 billion forecast and the biggest monthly increase since records began in 1993, Bank of England Money and Credit data published on Tuesday showed. The series is not adjusted for inflation.

The same release showed lenders approved 54,918 mortgages for house purchase in August, the fewest since December 2023 and below the 56,100 median forecast in a Reuters poll of economists. Approvals fell from 55,928 in July and sit below the roughly 60,100 average of the previous six months, a signal of weakening housing demand as borrowing and living costs bite.

Remortgaging approvals, which capture only remortgaging with a different lender, fell to 34,000 from 34,600 in July, while the effective interest rate on newly drawn mortgages rose to 4.6% from 4.45%.

Katie Clinton, head of financial services advisory at KPMG UK, said the fall pointed to “affordability pressures continuing to weigh on housing demand, as the shocks from the Iran conflict push up both inflation and mortgage rates”.

Matt Swannell, chief economic adviser to the Item Club, said buyers had been deterred by elevated borrowing costs and expectations that the Bank of England could raise rates. “The mortgage market has come under significant pressure since the Middle East conflict intensified earlier this year,” he said.

Sources

• Reuters, “UK consumer lending rises at fastest pace since 1993, BoE says”, 29 September 2026: https://www.reuters.com/world/uk/uk-consumer-lending-rises-fastest-pace-since-1993-boe-says-2026-09-29/
• Clacton and Frinton Gazette (PA), “UK mortgage approvals fall to lowest since end of 2023”, 29 September 2026: https://www.clactonandfrintongazette.co.uk/news/national/26590043.uk-mortgage-approvals-fall-lowest-since-end-2023/