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 fell by £0.3 billion, to £2.5 billion in September.
- Net mortgage approvals for house purchases rose to 65,600 in September, the highest level since August 2022 (72,000). Similarly, approvals for remortgaging increased by 3,100 to 30,800.
- Net consumer credit borrowing by individuals was £1.2 billion in September, down from £1.4 billion in the previous month.
- During September, private non-financial corporations (PNFCs) raised, on net, £3.2 billion of finance, compared to £6.9 billion of net finance raised in August.
- The net flow of sterling money (known as M4ex) was £8.9 billion in September, compared to £1.6 billion in August. The net flow of M4ex was driven by households’ and non-intermediate other financial corporations’ (NIOFCs’) holdings of money, which increased by £8.2 billion and £3.2 billion in September, respectively. These were partly offset by PNFCs decreasing their holdings of money by £2.6 billion.
- The net flow of sterling net lending to private sector companies and households (M4Lex) was £15.4 billion in September, compared to £3.3 billion in the previous month. September’s lending was driven by increases of £10.2 billion, £3.1 billion, and £2.2 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 fell by £0.3 billion to £2.5 billion in September, following three consecutive monthly increases. The annual growth rate for net mortgage lending rose to 0.9% in September from 0.7% in August, continuing the upward trend observed since April 2024. Gross lending decreased to £19.3 billion in September, from £19.7 billion in August. Similarly, repayments fell by £0.6 billion over the same period, to £17.6 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 700 to 65,600 in September, the highest level since August 2022 (72,000). Likewise, approvals for remortgaging (which only capture remortgaging with a different lender) rose for the second consecutive month to 30,800 in September, a month-on-month increase of 3,100 (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 8 basis points, to 4.76% in September. Over the same period, the rate on the outstanding stock of mortgages increased slightly to 3.74%, from 3.72% in the previous month.
Consumer credit (M&C Tables B and C):
In September, net borrowing of consumer credit by individuals decreased slightly to £1.2 billion, from £1.4 billion in the previous month (Chart 2). Within this, net borrowing through credit cards decreased from £0.5 billion in August to £0.4 billion in September, while net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) fell from £0.9 billion to £0.8 billion over the same period.
The annual growth rate for all consumer credit dipped slightly to 7.5% in September, from 7.7% in August. Over the same period, the annual growth rates for credit card borrowing fell to 9.5% from 10.0%, while the annual growth rate for other forms of consumer credit remained stable at 6.6%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts was 22.96% in September, a 25-basis point increase from August, reaching a new series high. The effective rate on interest-bearing credit cards increased in September, from 21.59% to 21.70% (also a new series high), while the effective rate on new personal loans to individuals fell by 58 basis points and now sits at 8.69%.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies rose by £8.2 billion in September. Within this, households deposited an additional £3.9 billion into ISAs, £3.4 billion into interest-bearing sight accounts, £0.8 billion into non-interest bearing sight accounts, and £0.4 billion into 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 6 basis points, to 4.31% in September. The effective rates on the outstanding stock of time and sight deposits were 3.93% and 2.12% in September, respectively, down from 3.97% and 2.14% in August.
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 – private non-financial companies (PNFCs) and public corporations – was broadly flat in September, compared to £1.8 billion of net borrowing in August. Within this measure, net borrowing by large non-financial businesses fell to £0.7 billion in September, from £2.4 billion in the previous month, while net repayments by small and medium-sized non-financial businesses (SMEs) was unchanged at £0.6 billion.
The annual growth rate of borrowing by large businesses decreased to 1.5% in September from 2.9% in August, while the annual growth rate of borrowing by SMEs rose slightly to -3.7% over the same period, from -3.9% (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 6.59% in September, down from 6.75% in August. The effective interest rate on new loans to SMEs decreased by 14 basis points, to 7.16% in September.
Net Finance Raised (M&C Table F):
PNFCs raised, on net, £3.2 billion of finance in September, compared to £6.9 billion in August. This was driven by £3.7 billion of net bond issuance, and £3.1 billion of net borrowing through loans from banks and building societies. These were partly offset by £1.5 billion of net equity buybacks and £0.3 billion of net commercial paper repayments (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In September, UK non-financial businesses deposited £1.5 billion with banks and building societies in all currencies, following net withdrawals of £0.3 billion in August. The effective rate on new time deposits from PNFCs rose by 13 basis points, to 4.36% in September, while the effective rate on stock sight deposits decreased slightly to 2.67%, from 2.70% in the previous month.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
The net flow of sterling money (knows as M4ex) was £8.9 billion in September, up from £1.6 billion in August. The net flow of M4ex was driven by households’ and non-intermediate other financial corporations’ (NIOFCs’) holdings of money, which increased by £8.2 billion and £3.2 billion in September respectively. These were partly offset by PNFCs decreasing their holdings of money by £2.6 billion.
The net flow of sterling net lending to private sector companies and households (M4Lex) was £15.4 billion in September, compared to £3.3 billion in the previous month. September’s lending was driven by increases of £10.2 billion, £3.1 billion, and £2.2 billion in the flow of net lending to NIOFCs, households, and PNFCs respectively.
