UK Mortgage Lending Falls 4%, Cameron Meets European Leaders

Arthi Gupta
18 Nov, 2011
New York City

The UK indexes traded lower as European leaders struggle to increase the role of the central bank in direct lending to nations. UK Prime Minister Cameron met with European leaders to press his case and resist the amendment to the Lisbon Treaty. The UK mortgage lending decreased 4% in October.

[R]3:30 PM London – The UK indexes traded lower as European leaders struggle to increase the role of the central bank in direct lending to nations. UK Prime Minister Cameron met with European leaders to press his case and resist the amendment to the Lisbon Treaty. The UK mortgage lending decreased 4% in October.[/R]

UK stocks edged lower as European leaders struggle to find a solution to the rising debt yield in the euro zone.

Prime Minister Cameron and German Chancellor Angela Merkel after a meeting in Berlin noted at the press conference that two countries remain divided in how to apply financial transaction tax.

Cameron also pressed for the central bank to take a larger role in supporting the struggling economies of the euro zone. Germany and several northern European nations are looking for a European Union’s Lisbon Treaty amendment to increase the fiscal union in the euro zone, resisted by the UK.

German Chancellor Angela Merkel has refused to issue joint euro area bonds or to allow the European Central Bank to play a larger role in resolving the debt crisis, whereas France wants the central bank to participate more actively to stem the crisis.

However, markets were focused on the yields in the sovereign bonds markets in Europe. The yields were stable today on the rumors that the European Central Bank will lend money to the International Monetary Fund to lend to increase its lending to the troubled nations in the zone.

Spanish 10-year bonds fell to 6.71%, Italian yields moderated to 6.63% and French 10-year bonds inched up to 3.53% yield.

In London, FTSE 100 Index declined 58.83 or 1.1% to 5,364.14 and the pound edged higher to $1.5822. For the week, the FTSE 100 Index slumped 3.3%.

The Bank of England monetary policy committee''s external member Martin Weale said in an interview on Thursday that there is a ""very strong case"" for another round of quantitative easing next year, unless the outlook improves.

UK Gross Mortgage Lending Drops

Gross mortgage lending decreased 4% in October from September, to an estimated £13.1 billion, the Council of Mortgage Lenders reported today. Lending rose 13% from a year ago level.

Total of 11.2 million mortgages are outstanding in the UK with loans valued at £1.2 trillion, according to the CML.

Gainers & Losers

Capita Group Plc slumped 4% to 641 pence after the professional support solutions provider said it projects a ""reasonable"" 7% revenue growth for the full-year 2011, but organic revenues are estimated to decline on tough business conditions.

Chemring Group Plc plunged 15.7% to 408 pence after the military decoy hardware maker said fourth quarter revenue rose 16% to £252 million, from £218 million in the same period last year.

Filtrona plc fell 1.5% to 371.90 pence after the supplier of speciality plastic and fiber products agreed for the acquisition of Richco, Inc. for $110 million in cash.

Regus Plc rose 2.2% to 84.65 pence after the short term office space realtor said, in the four months to October, revenues grew 17% to £394 million compared to £336 million in the period last year.

Rotork Plc dropped 2.2% to 1,632 pence after the industrial goods and machinery maker said third quarter revenues increased 13.4% from the prior year on the back of strong order flow.

Separately, the company said it has acquired Fairchild Industrial Products Co., a manufacturer of high-precision pneumatic controls and power transmission products for a wide range of industries.