Britain’s fragile economy was dealt a body blow yesterday as new figures showed a slump in mortgage lending.
Bank of England figures showed just 44,192 home loans were approved in June – down from 50,544 in May and the lowest level since December 2010.
The plunge in lending made grim reading for Chancellor George Osborne as Britain remains trapped in the longest downturn for 100 years.
Slump: Bank of England figures showed that the number of home loans approved in June was the lowest since December 2010. It also piled pressure on the Bank to slash interest rates to zero in a desperate effort to breathe life into the economy.
In a further dent to recovery hopes, separate surveys showed consumer confidence at rock bottom and a sharp slowdown in sales on the high street.
Michael Saunders, an economist at investment bank Citi, said the data ‘looks like a precursor to continued economic stagnation rather than recovery’.
The economy shrunk 0.7 per cent in the second quarter of the year – leaving Britain in its longest double-dip recession since quarterly records began in 1955.
Fears are mounting that Britain is facing an unprecedented ‘triple-dip’ recession – slamming back into reverse as the eurozone crisis escalates next year following a brief Olympic bounce.
Ruth Lea, economic adviser to the Arbuthnot Banking Group, said: ‘Britain is experiencing a shallow recession, a double-dip, and we still expect some improvements in the second half of the year.