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 £4.2 billion in January.
- Net mortgage approvals for house purchases decreased by 300 to 66,200 in January, compared to an increase of 400 in December. Approvals for remortgaging increased by 2,200 to 32,900, after falling for the previous two months.
- Net consumer credit borrowing by individuals was £1.7 billion in January, up from £1.1 billion in the previous month. Within this, net borrowing through credit cards increased to £1.1 billion from £0.4 billion, and was the highest increase since November 2023.
- During January, private non-financial corporations (PNFCs) repaid, on net, £2.4 billion of finance, compared to repayments of £2.9 billion in December.
- The net flow of sterling money (known as M4ex) was £25.7 billion in January, compared to £10.5 billion in December. This was mostly driven by non-intermediate other financial corporations’ (NIOFCs’) holdings of money, which increased by £10.7 billion.
- The net flow of sterling net lending to private sector companies and households (M4Lex) was £7.2 billion in January, compared to £5.0 billion in the previous month. Households accounted for £4.6 billion of the January flow.
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 £4.2 billion in January, following an increase in net borrowing of £1.1 billion in December. The annual growth rate for net mortgage lending rose to 1.8% in January from 1.5% in December, continuing the upward trend observed since April 2024. Gross lending was little changed in January at £21.3 billion, while gross repayments decreased to £16.3 billion, from £18.5 billion in December.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, decreased by 300 to 66,200 in January, following an increase of 400 in December. Approvals for remortgaging (which only capture remortgaging with a different lender) increased by 2,200 to 32,900 in January, after falling over the previous two months (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased by 4 basis points, to 4.51% in January. The rate on the outstanding stock of mortgages was 3.81% in January, up from 3.79% in December.
Consumer credit (M&C Tables B and C):
In January, net borrowing of consumer credit by individuals increased to £1.7 billion, from £1.1 billion in the previous month (Chart 2). Within this, net borrowing through credit cards increased to £1.1 billion in January, from £0.4 billion in December, and was the highest increase since November 2023 (£1.2 billion). Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) remained at £0.7 billion in January.
The annual growth rate for all consumer credit decreased slightly to 6.4% in January, from 6.5% in December. Over the same period, the annual growth rate for credit card borrowing increased to 8.5% from 8.1%, while the annual growth rate for other forms of consumer credit fell to 5.5% from 5.8%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts increased by 57 basis points to 23.07% in January, a series high. The effective rate on interest-bearing credit cards increased by 28 basis points in January, to 21.85%, also a series high. Meanwhile, the effective rate on new personal loans to individuals decreased by 6 basis points, to 8.79% in January.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies increased by £8.4 billion in January, following net deposits of £4.7 billion in December. This was driven by households depositing an additional £5.4 billion and £2.2 billion into interest-bearing sight accounts and ISAs, respectively. Households also deposited £1.2 billion into non-interest-bearing sight accounts and withdrew £1.4 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 5 basis points, to 3.91% in January. The effective rates on the outstanding stock of time and sight deposits were 3.69% and 2.11% in January respectively, down from 3.74% and 2.17% in December.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables F-I):
In January UK non-financial businesses (PNFCs and public corporations) borrowed, on net, £2.4 billion of loans from banks and building societies (including overdrafts), following £0.4 billion of net repayments in December. Within this measure, large non-financial businesses borrowed, on net, £1.9 billion in January, compared to £0.9 billion of net repayments in December. Net borrowing by small and medium-sized non-financial businesses (SMEs) slightly increased to £0.5 billion in January from £0.4 billion the previous month.
The annual growth rate of borrowing by large businesses increased to 4.0% in January from 3.9% in December, while the annual growth rate of borrowing by SMEs increased to -1.7% from -1.9% (Chart 4).
Chart 4: Annual growth of lending to SMEs and large businesses
Seasonally adjusted
The effective interest rate on new loans from banks to UK PNFCs was 6.47% in January, up from 6.29% in December. By contrast, the effective interest rate on new loans to SMEs decreased, by 6 basis points, to 7.00% in January, the lowest level since May 2023.
Net Finance Raised (M&C Table F):
PNFCs repaid, on net, £2.4 billion of finance in January, following repayments of £2.9 billion in December. This was driven by £1.8 billion of net equity buybacks, £1.7 billion of net loan repayments to banks and building societies and £0.7 billion of net bond redemptions. These were partially offset by £0.2 billion of net commercial paper issuances (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In January, UK non-financial businesses withdrew £9.5 billion from banks and building societies in all currencies, following deposits of £13.0 billion in December. The effective rate on new time deposits from PNFCs fell by 12 basis points to 4.09% in January, and the effective rate on stock sight deposits also decreased slightly, to 2.57%, from 2.58% in the previous month.
Aggregate money (M4ex) and lending (M4Lex) (M&C Tables J and K)
The net flow of sterling money (known as M4ex) was £25.7 billion in January, the highest since January 2023 (£34.6 billion), compared to £10.5 billion in December. Within this, non-intermediate other financial corporations’ (NIOFCs’) increased their holdings of money by £10.7 billion compared to £2.0 billion in the previous month. Households and PNFCs also increased their holdings of money in January, by £8.4 billion and £6.6 billion, respectively, compared to £4.7 billion and £3.8 billion in December.
The flow of sterling net lending to private sector companies and households (M4Lex) was £7.2 billion in January, compared to £5.0 billion in the previous month. January’s lending was mostly driven by £4.6 billion of net lending to households. There were also flows of £1.4 billion and £1.3 billion of net lending to NIOFCs and PNFCs, respectively.
Queries
If you have any comments or queries about this release, please email DSD_MS@bankofengland.co.uk.
Next release date: 31 March 2025
