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 £1.0 billion, to £3.6 billion in December.
- Net mortgage approvals for house purchases slightly increased to 66,500 in December, compared to a decrease of 2,300 in November. Approvals for remortgaging decreased by 700 to 30,500, falling for a second consecutive month.
- Net consumer credit borrowing by individuals was £1.0 billion in December, slightly up from £0.9 billion in the previous month.
- During December, private non-financial corporations (PNFCs) repaid, on net, £2.8 billion of finance, compared to £1.8 billion of net finance raised in November.
- The net flow of sterling money (known as M4ex) was £8.9 billion in December, compared to -£0.6 billion in November. This was driven by households’ holdings of money, which increased by £4.5 billion.
- The net flow of sterling net lending to private sector companies and households (M4Lex) was £4.8 billion in December, compared to -£1.8 billion in the previous month. Households accounted for £4.0 billion of the December 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 £1.0 billion to £3.6 billion in December, following a decrease in net borrowing of £0.9 billion in November. The annual growth rate for net mortgage lending rose to 1.5% in December from 1.3% in November, continuing the upward trend observed since April 2024. Gross lending increased to £21.3 billion in December, from £20.8 billion in November, while gross repayments increased to £18.5 billion from £18.1 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 500 to 66,500 in December, following a fall of 2,300 in November. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 700 to 30,500 in December, falling for a second consecutive month (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased by 3 basis points, to 4.47% in December, the lowest since April 2023. The rate on the outstanding stock of mortgages remained broadly unchanged in December at 3.79%.
Consumer credit (M&C Tables B and C):
In December, net borrowing of consumer credit by individuals increased slightly to £1.0 billion, from £0.9 billion in the previous month (Chart 2). Within this, net borrowing through credit cards increased to £0.4 billion in December, from £0.3 billion in November. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) remained at £0.7 billion in December.
The annual growth rate for all consumer credit decreased slightly to 6.5% in December, from 6.6% in November. Over the same period, the annual growth rates for credit card borrowing increased to 8.1% from 8.0%, while the annual growth rate for other forms of consumer credit fell to 5.8% from 6.0%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts was 22.50% in December, a 36-basis point decrease from November. The effective rate on interest-bearing credit cards increased 3 basis points in December, to 21.57%. Meanwhile, the effective rate on new personal loans to individuals decreased by 11 basis points, to 8.85% in December.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies increased by £4.5 billion in December, following net deposits of £1.2 billion in November. This was driven by households depositing an additional £6.6 billion and £1.7 billion into interest-bearing sight accounts and ISAs, respectively. Households also withdrew £1.6 billion from interest-bearing time accounts and £0.2 billion from non-interest bearing sight 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 6 basis points, to 3.96% in December. The effective rates on the outstanding stock of time and sight deposits were 3.74% and 2.17% in December respectively, from 3.80% and 2.21% in November.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables F-I):
In December UK non-financial businesses (PNFCs and public corporations) repaid, on net, £0.2 billion of loans from banks and building societies (including overdrafts), following £6.1 billion of net borrowing in November. Within this measure, large non-financial businesses repaid, on net, £0.7 billion in December, compared to £5.8 billion of net borrowing in November. By contrast, net borrowing by small and medium-sized non-financial businesses (SMEs) increased to £0.4 billion from £0.3 billion.
The annual growth rate of borrowing by large businesses decreased to 3.9% in December from 4.1% in November. Over the same period, the annual growth rate of borrowing by SMEs increased to -1.9% from -2.6% (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 6.29% in December, down from 6.56% in November. The effective interest rate on new loans to SMEs also decreased, by 11 basis points, to 7.06% in December.
Net Finance Raised (M&C Table F):
PNFCs repaid, on net, £2.8 billion of finance in December, a drop from £1.8 billion of net finance raised in November. This was driven by £2.0 billion of net equity buybacks, £1.9 billion of net bond redemptions and £1.1 billion of net commercial paper repayments. These were partially offset by £3.3 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 December, UK non-financial businesses deposited £13.0 billion with banks and building societies in all currencies, following withdrawals of £5.9 billion in November. The effective rates on new time deposits and stock sight deposits from PNFCs both fell by 1 basis point in December, to 4.21% and 2.58%, respectively.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
The net flow of sterling money (known as M4ex) was £8.9 billion in December, compared to -£0.6 billion in November. The net flow of M4ex was driven by households’ holdings of money, which increased by £4.5 billion in December. PNFCs and non-intermediate other financial corporations’ (NIOFCs’) also increased their holdings of money in December by £2.9 billion and £1.5 billion, respectively.
The net flow of sterling net lending to private sector companies and households (M4Lex) was £4.8 billion in December, compared to -£1.8 billion in the previous month. December’s lending was driven by increases of £4.0 billion and £1.1 billion in the flow of net lending to households and PNFCs, respectively. This was partly offset by repayments of £0.3 billion by NIOFCs.
Queries
If you have any comments or queries about this release, please email DSD_MS@bankofengland.co.uk.
Next release date: 3 March 2025
