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 increased from £3.6 billion to £4.4 billion in November.
- Mortgage approvals for house purchases decreased to 46,100 in November from 57,900 in October, the lowest level since June 2020 (40,500).
- The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 26 basis points, to 3.35% in November.
- Consumers borrowed an additional £1.5 billion in consumer credit, on net, above the £0.7 billion borrowed in October – driven by an additional £1.2 billion of credit card borrowing.
- Households deposited an additional £5.7 billion with banks and building societies in November. Within this, net flows into time deposits and non-interest bearing sight deposits decreased, to £10.0 billion (from £11.2 billion) and -£5.2 billion (from £2.5 billion), respectively. These were partially offset by the flow of interest bearing sight deposits, which increased from -£6.3 billion to -£1.6 billion in November.
- The effective interest rate paid on individuals’ new time deposits with banks and building societies was little changed, at 3.27% in November.
- Non-financial businesses (PNFCs and public corporations) borrowed £1.9 billion of bank loans in November, while non-financial companies (PNFCs) repaid £4.2 billion in market finance.
- The net flow of sterling money (known as M4ex) decreased to -£26.6 billion in November, from -£19.0 billion in October. Conversely, net lending to the private sector (known as M4Lex) rose to -£16.0 billion from -£29.6 billion over the same period. Both were driven by non-intermediate other financial corporations (NIOFCs), with net flows of -£26.3 billion and -£20.2 billion in M4ex and M4Lex, 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 individuals
Mortgage lending (M&C Tables D and E):
Net borrowing of mortgage debt by individuals increased from £3.6 billion to £4.4 billion in November (Chart 1). Gross lending decreased from £27.7 billion in October to £25.7 billion in November, while gross repayments dropped from £25.8 billion to £21.6 billion.Approvals for house purchases, an indicator of future borrowing, decreased to 46,100 in November, from 57,900 in October, the lowest level since June 2020 (40,500). Approvals for remortgaging (which only capture remortgaging with a different lender) fell to 32,500 in November from 51,300 in October, and were below the previous 6-month average of 48,100.
Chart 1: Mortgage lending
Seasonally adjusted flows
The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 26 basis points to 3.35% in November. The rate on the outstanding stock of mortgages increased by 9 basis points, to 2.38%.
Consumer credit (M&C Tables B and C):
Individuals borrowed an additional £1.5 billion in consumer credit in November, on net, following £0.7 billion of borrowing in October (Chart 2). This was higher than the previous 6-month average of £1.1 billion. The additional consumer credit borrowing in November was split between £1.2 billion on credit cards, which increased from £0.4 billion in October, and £0.3 billion through other forms of consumer credit (such as car dealership finance and personal loans).The annual growth rate for all consumer credit was little changed at 7.0% in November. The annual growth rate of credit card borrowing rose from 11.5% in October to 12.2% in November, while the annual growth rate of other forms of consumer credit decreased slightly from 5.0% in October to 4.8% in November.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts in November increased by 20 basis points, to 20.93%. The effective rate on new personal loans to individuals increased by 64 basis points to 7.87% in November, the highest level since December 2017 (7.96%). Conversely, the effective rate on interest bearing credit cards dropped slightly to 19.24% in November, from 19.31% in October.
Households’ deposits (M&C Table J):
Households deposited an additional £5.7 billion with banks and building societies in November, compared to £6.1 billion in October. Within the household deposits measure, net flows into time deposits decreased to £10.0 billion in November from £11.2 billion in October. Net flows into interest bearing sight deposits increased from -£6.3 billion to -£1.6 billion in November, while non-interest bearing sight deposit flows in November, at -£5.2 billion, were the lowest on record (series starting in October 1997). During November, households withdrew £0.3 billion from National Savings and Investment (NS&I) accounts (compared to £0.2 billion of net deposits in October); these are not captured within household deposits with banks and building societies, but can act as a substitute for them. The combined net flow into both deposits and NS&I accounts in November was £5.4 billion, a decrease from £6.3 billion in October and below the average monthly net flow of £5.6 billion during the previous six months (Chart 3).
Chart 3: Households’ deposits
Seasonally adjusted net flow
The effective interest rate paid on individuals’ new time deposits with banks and building societies was little changed, at 3.27% in November. The effective rate on the outstanding stock of time deposits increased by 29 basis points to 1.36% in November, the largest monthly increase since December 2021 when Bank Rate increases began. The effective rates on stock sight deposits rose 18 basis points to 0.70%.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables F-I):
UK non-financial businesses (PNFCs and public corporations) borrowed £1.9 billion of bank and building society loans in November (including overdrafts), on net, compared to £7.8 billion of net repayments in October. Within this, large non-financial businesses borrowed, on net, £2.2 billion in November, compared to £6.1 billion of net repayments in October. Small and medium sized non-financial businesses (SMEs) repaid £0.2 billion, on net in November, compared to £1.8 billion of net repayments in October.The annual growth rate of borrowing by large businesses decreased by 0.4 percentage points to 6.4% in November, while for SMEs it rose by 0.1 percentage points, to -3.8% (Chart 4).The average cost of new borrowing from banks by UK PNFCs increased by 52 basis points to an effective interest rate of 4.33% in November, and now sits 230 basis points above the December 2021 rate of 2.03%. The effective interest rate on new loans to SMEs increased by 78 basis points to 5.52% in November (above the December 2021 rate of 2.51%), and was the highest on record (series starting in January 2016).
Chart 4: Annual growth of lending to SMEs and large businesses
Seasonally adjusted
Market Finance (M&C Table F):
In November, private non-financial companies (PNFC) repaid £4.2 billion in market finance, in comparison to net zero finance raised in October. Within this, on net, companies bought back £2.5 billion of equity, redeemed £2.2 billion of bonds but issued £0.5 billion of commercial paper.
Businesses’ deposits:
In November, UK non-financial businesses withdrew, on net, £3.7 billion of deposits from banks and building societies in all currencies, compared to a net withdrawal of £14.9 billion in October.The effective rate on new time deposits increased by 30 basis points to 2.66%, and the effective rate on stock sight deposits increased by 36 basis points to 1.06%.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
The net flow of sterling money (known as M4ex) decreased to -£26.6 billion in November, from -£19.0 billion in October. This was mainly driven by net flows of non-intermediate other financial corporations’ (NIOFCs’) holdings of money decreasing to -£26.3 billion in November, from -£23.8 billion in October. Net flows of PNFCs’ holdings of money also fell to -£6.0 billion, from -£1.3 billion in October.The flow of sterling net lending to private sector companies and households (M4Lex) was -£16.0 billion in November, compared to -£29.6 billion in October, and driven by an increase in the flow of net lending to NIOFCs to -£20.2 billion (from -£32.9 billion in October).
Queries
If you have any comments or queries about this release please email DSD_MS@bankofengland.co.uk.
Next release date: 31 January 2023
