Mortgage approvals have more than halved since their peak at the end of 2006, Bank of England data showed yesterday, illustrating the extent to which tougher credit conditions and falling house prices have hit demand.

The Bank said the number of mortgages approved for house purchases fell from 63,000 in March to 58,000 in April – 55% below the peak of almost 130,000 in late 2006 and the lowest since such records began in 1999.

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The drop was sharper than expected, after the British Bankers’ Association said that approvals by their members had risen slightly in the same period and led economists to predict continued falls in house prices.

The manufacturing sector is also feeling the squeeze of weakening demand and rampant cost inflation, according to a survey that highlights the pressures likely to persuade policymakers to keep interest rates on hold for the immediate future.

Financial Times, The Times