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:
- Net borrowing of mortgage debt by individuals rose by £0.9 billion, to £3.4 billion in October.
- Net mortgage approvals for house purchases rose to 68,300 in October, the highest level since August 2022 (72,200). Similarly, approvals for remortgaging increased by 500 to 31,400.
- Net consumer credit borrowing by individuals was £1.1 billion in October, slightly down from £1.2 billion in the previous month.
- During October, private non-financial corporations (PNFCs) repaid, on net, £1.9 billion of finance, compared to £3.8 billion of net finance raised in September.
- The net flow of sterling money (known as M4ex) was £19.2 billion in October, compared to £7.4 billion in September. The net flow of M4ex was driven by households’ holdings of money, which increased by £20.2 billion, the largest increase since December 2020 (£21.7 billion), and higher than any pre-Covid figures on record. PNFCs also increased their holdings of money by £2.9 billion, while non-intermediate other financial corporations’ (NIOFCs’) decreased their holdings of money by £3.8 billion.
- The net flow of sterling net lending to private sector companies and households (M4Lex) was £11.8 billion in October, compared to £16.0 billion in the previous month. October’s lending was driven by increases of £4.7 billion, £3.6 billion, and £3.5 billion in the flow of net lending to NIOFCs, households, and PNFCs, respectively.
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 by £0.9 billion to £3.4 billion in October, following a decrease in net borrowing of £0.3 billion in September. The annual growth rate for net mortgage lending rose to 1.1% in October from 0.9% in September, continuing the upward trend observed since April 2024. Gross lending increased to £20.2 billion in October, from £19.5 billion in September, while gross repayments where little changed at £17.7 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 2,200 to 68,300 in October, the highest level since August 2022 (72,200). Likewise, approvals for remortgaging (which only capture remortgaging with a different lender) rose for the third consecutive month to 31,400 in October, a month-on-month increase of 500 (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 15 basis points, to 4.61% in October, the lowest since May 2023. Over the same period, the rate on the outstanding stock of mortgages increased from 3.74% in September to 3.78% in October, a further series high.
Consumer credit (M&C Tables B and C):
In October, net borrowing of consumer credit by individuals decreased slightly to £1.1 billion, from £1.2 billion in the previous month (Chart 2). Within this, net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) fell from £0.8 billion in September to £0.6 billion in October. There was some offset from net borrowing through credit cards, which increased from £0.4 billion to £0.5 billion over the same period.
The annual growth rate for all consumer credit decreased slightly to 7.3% in October, from 7.5% in September. Over the same period, the annual growth rates for credit card borrowing remained stable at 9.5%, while the annual growth rate for other forms of consumer credit fell to 6.3% from 6.6%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts was 22.94% in October, a 2-basis point decrease from September. The effective rate on interest-bearing credit cards increased slightly in October, from 21.70% to 21.74%, a further series high. Meanwhile, the effective rate on new personal loans to individuals increased by 16 basis points, to 8.85%, following a decrease of 58 basis points in September.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies rose by £20.2 billion in October, the largest increase since December 2020 (£21.7 billion). This was driven by households depositing an additional £14.4 billion into interest-bearing sight accounts, the highest since March 2021 (£14.9 billion). Both of these increases are higher than any pre-Covid figures on record. Households also deposited £3.1 billion into ISAs and £1.5 billion into non-interest bearing sight accounts, but withdrew £0.1 billion from interest-bearing time accounts (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 fell by 15 basis points, to 4.16% in October. The effective rates on the outstanding stock of time and sight deposits were 3.86% and 2.11% in October respectively, down from 3.93% and 2.12% in September.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables F-I):
Net borrowing of bank and building society loans (including overdrafts) by UK non-financial businesses (PNFCs and public corporations) increased to £3.9 billion in October, up from £0.1 billion in September. Within this measure, net borrowing by large non-financial businesses rose to £3.3 billion in October, from £0.8 billion in the previous month. Net borrowing by small and medium-sized non-financial businesses (SMEs) increased to £0.6 billion, up from repayments of £0.6bn in September.
The annual growth rate of borrowing by large businesses increased to 2.2% in October from 1.5% in September, while the annual growth rate of borrowing by SMEs rose to -2.9% over the same period, from -3.7% (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 6.68% in October, up from 6.59% in September. The effective interest rate on new loans to SMEs increased by 10 basis points, to 7.26% in October.
Net Finance Raised (M&C Table F):
PNFCs repaid, on net, £1.9 billion of finance in October, a drop from £3.8 billion of net finance raised in September. This was driven by £2.3 billion of bond redemptions, £2.0 billion of net equity buybacks and £0.4 billion of net commercial paper repayments. These were partially offset by £3.9 billion of net borrowing through loans from banks and building societies (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In October, UK non-financial businesses withdrew £6.3 billion from banks and building societies in all currencies, following net deposits of £1.5 billion in September. The effective rate on new time deposits from PNFCs fell by 6 basis points, to 4.30% in October, while the effective rate on stock sight deposits increased slightly to 2.68%, from 2.67% in the previous month.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
The net flow of sterling money (known as M4ex) was £19.2 billion in October, the highest since December 2023 (£20.1 billion), compared to £7.4 billion in September. The net flow of M4ex was driven by households’ holdings of money, which increased by £20.2 billion in October. PNFCs also increased their holdings of money by £2.9 billion, while non-intermediate other financial corporations’ (NIOFCs’) decreased their holdings of money by £3.8 billion.
The net flow of sterling net lending to private sector companies and households (M4Lex) was £11.8 billion in October, compared to £16.0 billion in the previous month. October’s lending was driven by increases of £4.7 billion, £3.6 billion, and £3.5 billion in the flow of net lending to NIOFCs, households, and PNFCs respectively.
Queries
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Next release date: 3 January 2025
