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 mortgage approvals for house purchases were 61,100 in April, little changed from 61,300 in March. Net approvals for remortgaging decreased to 29,900 from 33,500 over the same period.
- In April, UK non-financial businesses (PNFCs and public corporations) repaid, on net, £1.1 billion of loans to banks and building societies.
- The net flow of sterling money (known as M4ex) was £10.3 billion in April. This was mainly driven by households’ holdings of money, which increased by £8.4 billion in April, the highest flow since September 2022 (£8.8 billion). Within the increase in households’ holdings of money, households deposited an additional £11.7 billion into ISAs, the highest since records began in April 1999.
- The flow of sterling net lending to private sector companies and households (M4Lex) decreased to £1.2 billion in April. This was mainly driven by a decrease in net lending to non-intermediate other financial corporations (NIOFCs) to a flow of -£1.0 billion from £9.8 billion in March.
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):
Individuals borrowed, on net, £2.4 billion of mortgage debt in April, compared to £0.5 billion in March. The annual growth rate for net mortgage lending rose for the first time since October 2022 to 0.2% in April from -0.1% in March (a series low). Gross lending rose slightly to £20.6 billion in April from £20.5 billion in March, its highest level since January 2023.Over the same period, gross repayments decreased to £19.0 billion from £19.4 billion.
Net approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, were 61,100 in April, little changed from 61,300 in March. Net approvals for remortgaging (which only capture remortgaging with a different lender) decreased to 29,900 from 33,500 over the same period (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased slightly by 1 basis point, to 4.74% in April. The rate on the outstanding stock of mortgages increased by 7 basis points, to 3.57% in April.
Consumer credit (M&C Tables B and C):
Net consumer credit borrowing decreased from £1.4 billion in March to £0.7 billion in April (Chart 2). This was driven by lower net borrowing through credit cards, which fell from £0.7 billion to £0.2 billion in April, and lower net borrowing through other forms of consumer credit (such as car dealership finance and personal loans), which fell from £0.8 billion to £0.5 billion over the same period.
The annual growth rate for all consumer credit decreased from 8.7% to 8.1% in April. The annual growth rate for credit cards fell from 11.9% to 10.8% in April. Other forms of consumer credit also decreased, from 7.3% to 6.9% over the same period.
Chart 2: Consumer credit*
Seasonally adjusted
Footnotes
- *The Office for National Statistics transferred their collection of monthly consumer credit data by ‘other specialist lenders’ to the Bank of England in April 2024. The Bank of England began collecting these data on ’Form MC’ and made initial amendments to the reporting population. The overall impact of these amendments has been broadly balanced, with only a slight increase in the amounts outstanding, and some changes to gross lending and repayments series for consumer credit. For details behind this change, please see: https://www.bankofengland.co.uk/statistics/details/further-details-about-total-lending-to-individuals-data.
In April, the effective interest rate on interest-charging overdrafts and interest-bearing credit cards increased by 55 and 20 basis points, to 22.76% and 21.46%, respectively. The effective rate on new personal loans to individuals rose by 62 basis points, to 9.01%.
Households’ deposits (M&C Table J):
In April, households deposited an additional £8.4 billion with banks and building societies, the highest net inflow since September 2022 (£8.8 billion). This was almost wholly driven by households depositing an additional £11.7 billion into ISAs, the highest since records began in April 1999, £0.6 billion into interest-bearing time deposits and £0.4 billion non-interest-bearing sight deposits. Conversely, households withdrew £1.4 billion from interest-bearing sight deposits (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 rose by 3 basis points, to 4.40%. The effective rate on the outstanding stock of time deposits increased by 4 basis points to 3.88%, and the effective rate on stock sight deposits was unchanged at 2.12%.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables F-I):
In April, UK non-financial businesses (PNFCs and public corporations) repaid, on net, £1.1 billion of loans from banks and building societies (including overdrafts), little changed when compared to March (£0.9 billion). Within this measure, large non-financial businesses repaid £0.4 billion in April, compared to £0.8 billion of repayments in March. By contrast, small and medium-sized non-financial businesses (SMEs) made net repayments of £0.8 billion in April, compared to net repayments of £0.1 billion in March.
The annual growth rate of borrowing by large businesses was -0.3% in April, down from 0.5% in March. The growth rate of lending to SMEs increased slightly, to -4.6% in April from -4.7% over the same period (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 rose by 2 basis points to 6.97%, and the effective interest rate on new loans to SMEs rose by 10 basis points to 7.59% in April.
Net Finance Raised (M&C Table F):
In April, private non-financial corporations (PNFCs) repaid, on net, £3.3 billion of finance compared to raising £9.6 billion in finance in March. This was mainly driven by PNFCs buying back £2.0 billion of equity, continuing the trend of net equity buybacks since October 2021. PNFCs also repaid £1.5 billion of loans to banks and building societies in April. This was partially offset by PNFCs issuing on net £0.3 billion in commercial paper and £0.3 billion of net bond issuance (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
During April, UK non-financial businesses withdrew £2.8 billion of deposits from banks and building societies, in all currencies, compared to depositing £1.4 billion in March. The effective rate on new time deposits from PNFCs decreased by 4 basis points to 4.60% in April, while the effective rate on stock sight deposits increased by 1 basis point to 2.70% over the same period.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
The net flow of sterling money (known as M4ex) was £10.3 billion in April, compared to £11.6 billion in March. The net flow of M4ex was mainly driven by households’ holdings of money, which increased by £8.4 billion in April, up from an £8.3 billion increase in March. PNFCs increased their holdings of money by £5.2 billion this April, this was partially offset by NIOFCs decreasing their holdings of money by £3.3 billion over the same period.
The flow of sterling net lending to private sector companies and households (M4Lex) decreased from £10.0 billion in March to £1.2 billion in April. This was driven by the flow of net lending to non-intermediate other financial corporations (NIOFCs), which decreased from £9.8 billion in March, to -£1.0 billion in April. This was partly offset by an increase in the flow of net lending to households, from £0.1 billion in March to £1.7 billion in April and the flow of net lending to PNFCs, from £0.2 billion to £0.5 billion over the same period.
Queries
If you have any comments or queries about this release, please email DSD_MS@bankofengland.co.uk.
Next release date: 1 July 2024
