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 decreased by £0.9 billion to £4.5 billion in July, compared to a £3.2 billion increase to £5.4 billion of net borrowing in June.
- Net mortgage approvals for house purchases increased by 800 in July, to 65,400. Approvals for remortgaging decreased by 2700 in July, to 38,900.
- Net borrowing of consumer credit by individuals rose slightly to £1.6 billion, from £1.5 billion in the previous month. Within this, net borrowing through credit cards slightly increased to £0.8 billion in July, from £0.7 billion in June. Net borrowing through other forms of consumer credit increased to £0.9 billion in July, from £0.7 billion over the same period.
- The annual growth rate of borrowing by large businesses increased from 6.7% to 8.0% in July. The annual growth rate of borrowing by SMEs increased from 0.3% to 0.9%, the highest since August 2021 (1.3%).
- Private non-financial corporations (PNFCs) borrowed, on net, £0.3 billion of finance in July, following net borrowing of £1.1 billion in June.
- The net flow of sterling money (known as M4ex) was £7.1 billion in July, compared to £11.4 billion in June. Within this, households increased their holdings of money by £7.3 billion. Additionally, PNFCs also increased their holdings of money by £0.5 billion, while NIOFCs decreased holdings by £0.6 billion.
- The flow of sterling net lending to private sector companies and households (M4Lex) was £7.7 billion in July, compared to £19.9 billion in June. This was driven by increases of £5.2 billion and £3.4 billion in net lending to households and PNFCs respectively, while partly offset by net repayments by NIOFCs of £1.0 billion.
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 decreased by £0.9 billion to £4.5 billion in July, compared to a £3.2 billion increase of net borrowing to £5.4 billion in June. The annual growth rate for net mortgage lending slightly rose from 2.8% to 2.9% in July. Gross lending increased to £24.3 billion in July, from £24.0 billion in June. Gross repayments also rose in July, to £19.7 billion, from £19.2 billion in June.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 800 to 65,400 in July. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 2700, to 38,900 in July (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased for the fifth consecutive month, to 4.28% in July from 4.34% in June. However, the rate on the outstanding stock of mortgages remained at 3.88%.
Consumer credit (M&C Tables B and C):
In July, net borrowing of consumer credit by individuals slightly rose to £1.6 billion, from £1.5 billion in the previous month (Chart 2). Within this, net borrowing through credit cards slightly increased to £0.8 billion in July, from £0.7 billion in June. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to £0.9 billion in July, from £0.7 billion in June.
The annual growth rate for all consumer credit increased to 7.0% in July, from 6.8% in June. Over the same period, the annual growth rate for credit card borrowing rose to 10.1% from 9.7%, and the annual growth rate for other forms of consumer credit slightly increased to 5.6% from 5.5%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts decreased by 76 basis points, to 21.47% in July. Similarly, the effective rate on new personal loans to individuals decreased by 14 basis points, to 8.28%. The effective rate on interest-charging credit cards increased by 15 basis points, to 21.64%.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies increased by £7.3 billion in July, following a net increase of £8.0 billion in June. This was mainly driven by households depositing an additional £4.3 billion into interest bearing sight deposit accounts, £2.7bn into ISAs and £1.6 billion into non-interest bearing 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 decreased by 18 basis points, to 3.84% in July. The effective rate on the outstanding stock of time deposits fell by 4 basis points to 3.53%, and the effective rate on the outstanding stock of sight deposits decreased to 1.89% in July, from 1.91% in June.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables G-I):
In July, UK non-financial businesses (PNFCs and public corporations) borrowed, on net, £5.0 billion of loans from banks and building societies (including overdrafts), compared with £2.3 billion of net repayment in June. Within this measure, large non-financial businesses borrowed £4.3 billion, compared to £2.5 billion of net repayment in June. Net borrowing from small and medium-sized non-financial businesses (SMEs) increased to £0.7 billion in July, the highest since March 2021 (£0.9 billion), compared to £0.2 billion in June.
The annual growth rate of borrowing by large businesses increased to 8.0% in July, from 6.7% in June. The annual growth rate of borrowing by SMEs increased from 0.3% to 0.9%, the highest since August 2021 (1.3%) (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 decreased to 5.80% in July, from 5.94% in June. The effective interest rate on new loans to SMEs decreased by 10 basis points, to 6.41%.
Net Finance Raised (M&C Table F):
PNFCs raised, on net, £0.3 billion of finance in July, following net borrowing of £1.1 billion in June. This was driven by £2.2 billion of net borrowing through loans from banks and building societies, and £0.5 billion of net bond issuances. These were partially offset by £2.9 billion of net equity buybacks, and £0.3 billion of net commercial paper redemptions (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In July, UK non-financial businesses withdrew on net £0.4 billion from banks and building societies in all currencies, following net deposits of £2.3 billion in June. The effective rate on new time deposits from PNFCs fell by 4 basis points to 3.70% in July, and the effective rate on stock sight deposits remained unchanged at 2.25% over the same period.
Aggregate money (M4ex) and lending (M4Lex) (M&C Tables J and K)
The net flow of sterling money (known as M4ex) was £7.1 billion in July, compared to £11.4 billion in June. Within this, households increased their holdings of money by £7.3 billion. Additionally, PNFCs also increased their holdings of money by £0.5 billion, while NIOFCs decreased theirs by £0.6 billion.
The flow of sterling net lending to private sector companies and households (M4Lex) was £7.7 billion in July, compared to £19.9 billion in June. This was driven by increases of £5.2 billion and £3.4 billion in net lending to households and PNFCs, respectively, while partly offset by net repayments by NIOFCs of £1.0 billion.
Queries
If you have any comments or queries about this release, please email DSD_MS@bankofengland.co.uk.
Next release date: 29 September 2025
