GBP/USD Above 1.71 after Mortgage Data

Sterling edged down against the euro and dollar on Monday after data showed signs that tighter rules on UK mortgage lending were starting to have an effect, lessening the impetus for the Bank of England to raise interest rates soon.

Numbers released on Monday showed UK lenders approved the lowest number of mortgages for 11 months in May, showing tighter affordability rules introduced in April are dampening activity. Though total mortgage lending rose by the most since 2008, that mostly reflected past approvals and rising house prices.

Worries that the British housing market might be beginning to overheat prompted the BoE’s Financial Policy Committee (FPC) to announce a cap on home loans last week and tougher checks on whether borrowers can repay their mortgages.


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