GBP/USD under pressure as UK mortgage approvals miss forecasts sharply

GBP/USD faces downward pressure following significantly weaker-than-expected UK mortgage approval data released by the Bank of England. Mortgage approvals fell to 56,205 in May, well below the 62,900 consensus forecast and sharply down from the upwardly revised 66,034 in April. Net mortgage borrowing by individuals declined to £2.9 billion from £4.4 billion in April, falling considerably below the prior six-month average of £5.1 billion and marking the lowest level since May 2025. The data signals a notable cooling in the UK housing market, which could weigh on broader economic growth expectations. Consumer credit borrowing remained stable at £1.7 billion, providing a modest offset but insufficient to change the bearish narrative. The weak housing data may influence Bank of England rate expectations, with markets potentially pricing in a more dovish stance if economic softening persists. Traders should monitor upcoming UK GDP and inflation releases for confirmation of a broader slowdown. Near-term, the data adds to headwinds for sterling, with focus on whether support levels hold amid deteriorating fundamentals.