Overview
These monthly statistics on the amount of, and interest rates on, borrowing and deposits by households and businesses are used by the Bank’s policy committees to understand economic trends and developments in the UK banking system.
Key points:
- Individuals borrowed, on net, £2.8 billion of mortgage debt in July, the highest since November 2022 (£3.3 billion), and up from £2.6 billion in June.
- Net mortgage approvals for house purchases increased to 62,000 in July, the highest since September 2022 (65,100), and up from 60,600 in June. By contrast, approvals for remortgaging fell to 25,100 in July, from 27,300 over the same period.
- Net consumer credit borrowing rose to £1.2 billion in July, from £0.9 billion in June.
- Private non-financial corporations (PNFCs) repaid, on net, £3.6 billion of finance in July, a drop from £7.6 billion of net finance raised in June. This was driven by £2.3 billion of net equity buybacks and £1.3 billion of net loan repayments to banks and building societies.
- The net flow of sterling money (known as M4ex) was £10.2 billion in July, up from £4.3 billion in June. The net flow of M4ex was driven by households’ holdings of money, which increased by £5.7 billion in July. NIOFCs increased their holdings of money by £3.8 billion in July, and PNFCs also increased their holdings of money, by £0.7 billion over the same period.
- The flow of sterling net lending to private sector companies and households (M4Lex) increased to £8.6 billion in July, from £4.0 billion in June. This was driven by an increase in the flow of net lending to NIOFCs, to £3.5 billion in July, from £1.2 billion in June as well as an increase in the flow of net lending to households to £2.8 billion in July, from £1.9 billion in June. Similarly, the flow of lending to PNFCs increased to £2.3 billion in July from £0.9 billion over the same period.
References in the text point to the summary tables below. For further statistics, please see our visual summaries, Effective Rates (ER) statistical release, Capital Issuance statistical release, and Bankstats tables.
Lending to and deposits from individuals
Mortgage lending (M&C Tables D and E):
Net borrowing of mortgage debt by individuals increased to £2.8 billion in July, the highest since November 2022 (£3.3 billion), and up from £2.6 billion in June. The annual growth rate for net mortgage lending rose to 0.6% in July, following a rise to 0.5% in June, continuing the trend seen in previous months. Gross lending decreased to £19.6 billion in July, from £20.5 billion in June, while gross repayments decreased by £0.9 billion over the same period, to £17.4 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased to 62,000 in July, the highest since September 2022 (65,100), and up from 60,600 in June. Approvals for remortgaging (which only capture remortgaging with a different lender) fell to 25,100 in July, from 27,300 in June, continuing the downwards trend seen since March 2024 (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages was broadly unchanged at 4.81% in July. The rate on the outstanding stock of mortgages rose by 4 basis points to 3.69% in July, from 3.65% in June.
Consumer credit (M&C Tables B and C):
Net consumer credit borrowing rose to £1.2 billion in July, from £0.9 billion in June (Chart 2). Within this, net borrowing through credit cards remained stable at £0.5 billion in July, while net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to £0.7 billion, from £0.4 billion in June.
The annual growth rate for all consumer credit was little changed at 7.8% in July. The annual growth rate for credit card borrowing fell to 10.3% in July from 10.5% in June, while the annual growth rate for other forms of consumer credit remained stable at 6.7% in July.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rates on interest-charging overdrafts rose by 21 basis points, to 22.56% in July. The effective rate on interest bearing credit cards also rose, to 21.61% from 21.28% over the same period, a 33 basis point increase. Similarly, the effective rate on new personal loans to individuals increased by 21 basis points to 9.14% over the same period.
Households’ deposits (M&C Table J):
Household deposits with banks and building societies rose by £5.7 billion in July. This was driven by households depositing an additional £3.8 billion into ISAs, and £3.3 billion into interest-bearing sight accounts in July. By contrast, households withdrew £0.5 billion and £1.4 billion from interest-bearing time and non-interest bearing sight accounts respectively (Chart 3).
Chart 3: Breakdown of households’ deposits (Household M4)
Seasonally adjusted net flow
The effective interest rate paid on individuals’ new time deposits with banks and building societies decreased slightly by 2 basis points, to 4.42% in July. The effective rate on the outstanding stock of time deposits was little changed at 3.97%, while the effective rate on stock sight deposits bounced back by 3 basis points, to 2.14% in July.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables F-I):
During July, UK non-financial businesses (private non-financial companies (PNFCs) and public corporations) repaid, on net, £0.2 billion of bank and building society loans (including overdrafts), compared to borrowing £1.6 billion in June. Within this measure, net borrowing by large non-financial businesses decreased to £0.1 billion in July, from £2.4 billion in June. Net repayments by small and medium-sized non-financial businesses (SMEs) decreased to £0.3 billion in July from £0.8 billion in June.
The annual growth rate of borrowing by large businesses decreased, to 1.7% in July from 2.5% in June. By contrast, the annual growth rate of borrowing by SMEs increased, to -4.1% in July from -4.3% in the previous month (Chart 4).
Chart 4: Annual growth of lending to SMEs and large businesses
Seasonally adjusted
The average cost of new borrowing from banks by UK PNFCs was 6.90% in July, a 5 basis point increase from 6.85% in June. Over the same period, the effective interest rate on new loans to SMEs was 7.60%, a 7 basis point increase from 7.53%.
Net Finance Raised (M&C Table F):
PNFCs repaid, on net, £3.6 billion of finance in July, a drop from £7.6 billion of net finance raised in June. This was driven by £2.3 billion of net equity buybacks and £1.3 billion of net loan repayments to banks and building societies. PNFCs also redeemed, on net, £0.1 billion of bonds and £0.2 billion of commercial paper in July (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
During July, UK non-financial businesses deposited £0.1 billion with banks and building societies in all currencies, a decrease from £8.3 billion in June. The effective rate on new time deposits from PNFCs dropped 3 basis points to 4.57% in July, from 4.60% in June. By contrast, the effective rate on stock sight deposits increased by 5 basis points to 2.77%, from 2.72% over the same period.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
The net flow of sterling money (known as M4ex) was £10.2 billion in July, up from £4.3 billion in June. The net flow of M4ex was driven by households’ holdings of money, which increased by £5.7 billion in July. NIOFCs increased their holdings of money by £3.8 billion in July, and PNFCs also increased their holdings of money, by £0.7 billion over the same period.
The flow of sterling net lending to private sector companies and households (M4Lex) increased to £8.6 billion in July, from £4.0 billion in June. This was driven by an increase in the flow of net lending to NIOFCs, to £3.5 billion in July, from £1.2 billion in June as well as an increase in the flow of net lending to households to £2.8 billion in July, from £1.9 billion in June. Similarly, the flow of lending to PNFCs increased to £2.3 billion in July from £0.9 billion over the same period.
Queries
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Next release date: 30 September 2024
