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 £3.3 billion in February, following an increase in net borrowing of £0.8 billion in January.
- Net mortgage approvals for house purchases decreased by 600 to 65,500 in February, following a decrease of 400 in January. Approvals for remortgaging decreased by 800 to 32,000, following an increase of 2,100 in the previous month.
- Net consumer credit borrowing by individuals was £1.4 billion in February, down from £1.7 billion in the previous month. Within this, net borrowing through credit cards decreased to £0.8 billion from £1.1 billion.
- During February, private non-financial corporations (PNFCs) repaid, on net, £1.2 billion of finance, compared to net repayments of £2.3 billion in January.
- The net flow of sterling money (known as M4ex) was £1.2 billion in February, compared to £25.1 billion in January. Within this, households and non-intermediate other financial corporations (NIOFCs) increased their holdings of money, by £4.3 billion and £1.2 billion respectively, while PNFCs decreased their holdings of money by £4.3 billion.
- The net flow of sterling lending to private sector companies and households (M4Lex) was £5.1 billion in February, compared to £8.2 billion in January. Households accounted for £4.2 billion of the February 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 decreased by £0.9 billion to £3.3 billion in February, following an increase in net borrowing of £0.8 billion in January. The annual growth rate for net mortgage lending was little changed at 1.9% in February. Gross lending increased to £24.3 billion in February, from £21.7 billion in January, and was the highest since November 2022 (£24.9 billion). Gross repayments also increased in February, to £19.8 billion from £16.3 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, decreased by 600 to 65,500 in February, following a decrease of 400 in January. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 800 to 32,000 in February, following an increase of 2,100 in January (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased by 2 basis points, to 4.53% in February. The rate on the outstanding stock of mortgages was 3.87% in February, up from 3.81% in January.
Consumer credit (M&C Tables B and C):
In February, net borrowing of consumer credit by individuals decreased to £1.4 billion, from £1.7 billion in the previous month (Chart 2). Within this, net borrowing through credit cards decreased to £0.8 billion in February, from £1.1 billion in January. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) remained at £0.6 billion in February.
The annual growth rate for all consumer credit remained stable at 6.4% in February. The annual growth rate for credit card borrowing increased to 8.9% in February from 8.5% in January, while the annual growth rate for other forms of consumer credit fell to 5.2% from 5.5% over the same period.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts decreased by 7 basis points to 23.00% in February. The effective rate on interest-charging credit cards decreased by 3 basis points in February, to 21.82%. Meanwhile, the effective rate on new personal loans to individuals increased by 12 basis points, to 8.91% in February.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies increased by £4.3 billion in February, following net deposits of £8.7 billion in January. This was mostly driven by households depositing an additional £3.6 billion into ISAs. Households also deposited £0.5 billion each into interest-bearing and non-interest bearing sight accounts, while they withdrew £0.7 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 rose by 2 basis points, to 3.93% in February. The effective rates on the outstanding stock of time and sight deposits were 3.66% and 2.09% respectively in February, down from 3.69% and 2.11% in January.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables G-I):
In February UK non-financial businesses (PNFCs and public corporations) repaid, on net, £0.5 billion of loans from banks and building societies (including overdrafts), following £2.4 billion of net borrowing in January. Within this measure, large non-financial businesses repaid, on net, £0.2 billion, compared to £2.0 billion of net borrowing in January. Small and medium-sized non-financial businesses (SMEs) repaid, on net, £0.3 billion, compared to £0.5 billion of net borrowing in January.
The annual growth rate of borrowing by large businesses increased to 4.7% in February from 4.0% in January, and was the highest since January 2023 (5.5%). The annual growth rate of borrowing by SMEs increased to -1.5% from -1.7% (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 6.20% in February, down from 6.47% in January. The effective interest rate on new loans to SMEs also decreased, by 10 basis points, to 6.90% in February.
Net Finance Raised (M&C Table F):
PNFCs repaid, on net, £1.2 billion of finance in February, following net repayments of £2.3 billion in January. This was driven by £1.9 billion of net equity buybacks. These were partially offset by £1.1 billion of net bond issuance, £0.6 billion of net commercial paper issuance and £0.1 billion of net borrowing through loans from banks and building societies (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In February, UK non-financial businesses withdrew £13.6 billion from banks and building societies in all currencies, following withdrawals of £9.5 billion in January. The effective rate on new time deposits from PNFCs fell by 19 basis points to 3.90% in February, and the effective rate on stock sight deposits also decreased, to 2.46%, from 2.57% 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 £1.2 billion in February, compared to £25.1 billion in January. Within this, households and non-intermediate other financial corporations (NIOFCs) increased their holdings of money, by £4.3 billion and £1.2 billion respectively, compared to £8.7 billion and £9.5 billion in January. By contrast, PNFCs decreased their holdings of money in February by £4.3 billion, compared to an increase of £7.0 billion in January.
The flow of sterling net lending to private sector companies and households (M4Lex) was £5.1 billion in February, compared to £8.2 billion in January. February’s lending was mostly driven by £4.2 billion of net lending to households, following £4.7 billion of net lending in January. In February, there were also flows of £0.7 billion and £0.2 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: 1 May 2025
