The Bank of England's latest statistical release has shown flat mortgage approvals against a negative backdrop. The data goes against consensus of around 46,500 which was last month beaten by 2,600 and again surprises this month by edging up to 48,722.

The news comes following a new government and General Election resulting in a Conservative coalition.

Despite this, many economists at Ernst & Young ITEM club said: "The figures for mortgage approvals, a proxy for activity, tend to be well correlated with prices and the latest figures clearly point to falling prices over the second half of this year and into 2011, particularly now that supply shortages have eased."

Ernst & Young believe the rise in houses on the market has failed to deliver a rise in house prices and mortgage approvals as net lending to individuals - as released by the BoE today again 'edged' down from 0.4 billion to 0.3 billion - a drawback fueled by the expectation that net lending would rise to 0.7 bn.

The sterling's circulation meanwhile ticked up when comparing June to July after the percentile change reached 0.4 versus 0.1 to reach 3.1 pct up on the same period last year.

Bank of England