Key moments

• GBP/USD is maintaining relative stability around the 1.2900 mark.
• UK mortgage approvals fell significantly in February, reaching 65,481.
• The annual consumer lending growth stagnated at 6.4%, matching January’s three-year low.

February Housing Market Cools, Pound Sterling Shows Resilience

The UK housing market witnessed a notable slowdown in mortgage approvals during February, as revealed by the latest Bank of England data published on Monday. The GBP/USD pair remained largely unaffected, climbing a slight 0.11% but continuing to trade below 1.3000.

The Money and Credit report outlined 65,481 home loan authorizations, the lowest figure since August and a 560 decrease from January’s 66,041. This decline has been attributed to a combination of factors, including the impending rise in property transaction taxes, which seemingly dampened buyer enthusiasm.

This dip in mortgage approvals occurred against a backdrop of fluctuating consumer lending trends. While net unsecured lending saw an uptick to £1.358 billion, roughly $1.76 billion, it remained below last month’s £1.701 billion ($2.1 billion). The annual growth rate of consumer lending remained at 6.4%, mirroring January’s figure, which was the lowest in three years. This suggests a cautious approach to borrowing among consumers despite some positive retail sales data.

After the publishing of the report, GBP/USD demonstrated relative stability, with fluctuations seeing the pair hovering around the 1.2900 mark. This mild volatility persists at press time, and it occurs within a broader context of global market uncertainty, largely fueled by escalating trade tensions and geopolitical concerns. Reports of potential blanket 20% tariffs by the United States, alongside threats of secondary sanctions on clients of Russian oil companies, have contributed to a risk-averse market environment.

The UK’s FTSE 100 Index experienced a decline, falling over 1.2% and reflecting the prevailing market sentiment. The Trump administration’s upcoming announcement regarding its new tariff policies is anticipated to further influence market behavior.