UK SME lending fell for the first time this year in June

The British Bankers' Association (BBA) data released earlier on Tuesday showed that British banks approved the fewest mortgages for house purchase since March 2015 in June. Seperate data showed lending to UK businesses also dropped in June for the first time this year as nerves weighed in the run-up to June 23's UK referendum.

The value of net mortgage lending dropped to 1.399 billion pounds in June from 1.665 billion, though it was well above a low of 208 million pounds struck in April after a new tax was imposed on purchases of second homes and rental properties.

The number of mortgages approved by British banks last month dropped to 40,103 from May's downwardly revised 41,842, the BBA said. The fall was slightly less than analysts' forecast, but still the lowest figure since last March. The increase in stamp duty caused a sharp drop in approvals in April, but the latest decline was more likely due to Brexit after numbers briefly recovered in May.

Net lending to non-financial businesses fell by 526 million pounds in June, the biggest fall since December 2015. The BBA however, highlights that this is only one month’s data and it “cannot be associated entirely with the Brexit vote”.

“Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote. There has been a picture of “general nervousness” in the UK economy that has been present for a while,” BBA chief economist Rebecca Harding said.