Release Explanation: The index, comprised by the Bank of England, measures the number of mortgage approved for the purchase and refinance of homes throughout the United Kingdom. A higher number of mortgage approvals signal an increase in growth from all areas of the economy. The U.K. is heavily dependent in its financial sector for jobs and tax revenue, and a healthy increase in mortgages is indicative of stronger banking needs.
Trade Desk Thoughts: Net lending to individuals increased slightly in February. The number came in at £1.3B, as analysts’ expected. The number released for the month of January was also revised higher, to £1.2B. At the same time, the report showed that the number of loans approved for home purchase rose in February, to 38K.
In February, the lending report still indicates a troubled financial system, creating less and less credit. To some extent, it is still unsure if the strong rate cuts made by the BoE have affected the U.K. financial system in any way.
Forex Technical Reaction: The pound dropped 100 pips during the overnight session, breaking below the 50 and the 20-day simple moving averages.