(fxcue news) - UK mortgage approvals increased to a 22-month high in July as hopes of further interest rate cuts lured buyers to the housing market, data released by the Bank of England revealed Friday. Net mortgage approvals for house purchase rose to 62,000 in July from 60,600 in June. This was the highest since September 2022 and also exceeded economists' forecast of 60,500. Data showed that borrowing of mortgage debt by individuals increased to GBP 2.8 billion, the highest since November 2022, from GBP 2.6 billion in June. Meanwhile, gross lending fell to GBP 19.6 billion from GBP 20.5 billion and gross repayments decreased GBP 0.9 billion to GBP 17.4 billion. The 'effective' interest rate, which is the actual interest paid on newly drawn mortgages was broadly unchanged at 4.81 percent in July. Net consumer credit borrowing rose to GBP 1.2 billion in July from GBP 0.9 billion in June. Within this, net borrowing through credit cards remained stable at GBP 0.5 billion in July, while net borrowing through other forms of consumer credit increased moderately to GBP 0.7 billion. The annual growth rate for all consumer credit was little changed at 7.8 percent in July. Data showed that businesses repaid GBP 0.2 billion of bank and building society loans compared to borrowing GBP 1.6 billion in June. Net borrowing by large non-financial businesses decreased to GBP 0.1 billion in July from GBP 2.4 billion in June. Net repayments by small and medium-sized non-financial businesses fell to GBP 0.3 billion from GBP 0.8 billion in June. Today's data provide further evidence that a steady improvement in the flow and demand of credit is supporting the economic recovery, Capital Economics' economist Paul Dales said. That said, credit growth is unlikely to strengthen significantly until the Bank of England cuts interest rates much further, the economist noted. At the August meeting, the BoE had lowered its benchmark rate for the first time since the onset of the coronavirus pandemic. The bank rate was reduced by 25 basis points to 5.00 percent from 5.25 percent, which was the highest since early 2008.