The turmoil in credit markets appeared to have spread to UK households on Wednesday with activity in the housing market gumming up in December and lenders approving fewer mortgages than at any time since the mid-1990s.

The Bank of England said the number of mortgage approvals for home purchases fell from 81,000 in November to 73,000 in December, much lower than expected, well below the 100,000 average of the previous six months and the weakest at least since the statistical series started in 1999.