Mortgage approvals fell by more than half from a year earlier in October, according to data from the British Bankers' Association, which underlined the extreme pressure on the housing market.

Compared with the month of September, the number of mortgage approvals for house purchases fell slightly from 23,383 to 21,584 in October. The number of approvals for other purposes was similar to September. Consumer credit was subdued, rising by just £0.3bn, and personal deposits were flat.

David Dooks, statistics director at the BBA, said the figures reflected a much reduced appetite for borrowing. "Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October," he said.

Howard Archer of IHS Global Insight described the data as "extremely weak, maintaining the dire news on the housing market".

The number of mortgage approvals was the second lowest since the series started in 1997 and only fractionally above August's record low of 21,363. It was also down by two thirds from its July 2007 peak.

A separate report from the Office for National Statistics showed that business investment fell by 0.2 per cent in the third quarter from the previous three months. Compared with the third quarter of 2007, business investment has fallen by 0.5 per cent.

Business investment by private and public sector manufacturing rose an estimated 4 per cent on the quarter and 0.8 per cent since the third quarter of 2007. Within the private sector, business investment in services fell 0.5 per cent on the quarter, while business investment in construction and other production dropped1.6 per cent.

Mr Archer said the fall in business investment for the third quarter running was disappointing but unsurprising. He said "the only tiny crumb of comfort" was that the rate of decline moderated to 0.2 per cent quarter-on-quarter from 1.0 per cent in the second quarter and 1.9 per cent in the first. "We expect business investment to contract markedly further for some time to come, thereby contributing significantly to the downturn," he said.