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 £0.2 billion to £4.3 billion in August, following a £0.9 billion decrease to £4.5 billion in July.
- Net mortgage approvals for house purchases decreased by 500 in August, to 64,700. Approvals for remortgaging decreased by 900 in August, to 37,900.
- Net borrowing of consumer credit by individuals remained flat at £1.7 billion in August. Within this, net borrowing through credit cards slightly decreased to £0.7 billion in August, from £0.8 billion in July. Net borrowing through other forms of consumer credit slightly increased, to £1.0 billion from £0.9 billion.
- The annual growth rate of borrowing by large businesses increased from 8.1% to 8.6% in August. The annual growth rate of borrowing by SMEs increased from 1.0% to 1.2%, the highest since August 2021 (1.3%).
- Private non-financial corporations (PNFCs) borrowed, on net, £5.9 billion of finance in August, following net borrowing of £0.4 billion in July.
- The net flow of sterling money (known as M4ex) was £10.9 billion in August, compared to £6.7 billion in July. Within this, households increased their holdings of money by £5.4 billion and NIOFCs increased theirs by £5.0 billion. Additionally, PNFCs also increased their holdings of money by £0.6 billion.
- The flow of sterling net lending to private sector companies and households (M4Lex) was £10.0 billion in August, compared to £7.8 billion in July. This was driven by increases of £4.7 billion, £3.5 billion and £1.8 billion in net lending to households, PNFCs, and NIOFCs 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 and deposits from individuals
Mortgage lending (M&C Tables D and E):
Net borrowing of mortgage debt by individuals decreased by £0.2 billion to £4.3 billion in August, following a £0.9 billion decrease to £4.5 billion in July. The annual growth rate for net mortgage lending slightly rose, from 2.9% to 3.0% in August. Gross lending decreased to £22.7 billion in August, from £24.5 billion in July. Gross repayments increased in August, to £20.0 billion, from £19.8 billion in July.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, decreased by 500 to 64,700 in August. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 900, to 37,900 in August (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased for the sixth consecutive month, to 4.26% in August from 4.28% in July. The rate on the outstanding stock of mortgages increased slightly to 3.89% from 3.88%.
Consumer credit (M&C Tables B and C):
In August, net borrowing of consumer credit by individuals remained flat at £1.7 billion (Chart 2). Within this, net borrowing through credit cards slightly decreased to £0.7 billion in August, from £0.8 billion in July. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) slightly increased to £1.0 billion in August from £0.9 billion in July.
The annual growth rate for all consumer credit increased slightly to 7.1% in August, from 7.0% in July. Over the same period, the annual growth rate for credit card borrowing rose to 10.5% from 10.1%, and the annual growth rate for other forms of consumer credit slightly increased to 5.7% from 5.6%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts increased by 6 basis points, to 21.53% in August. Similarly, the effective rate on new personal loans to individuals increased by 4 basis points, to 8.32%. The effective rate on interest-charging credit cards decreased by 23 basis points, to 21.42%.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies increased by £5.4 billion in August, following a net increase of £7.1 billion in July. This was mainly driven by households depositing an additional £2.6 billion into interest-bearing sight deposit accounts, £2.3 billion into ISAs and £0.7 billion into non-interest bearing accounts (Chart 3). These inflows were partially offset by withdrawals of £1.9 billion from interest-bearing time accounts.
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 5 basis points, to 3.79% in August. The effective rate on the outstanding stock of time deposits fell by 4 basis points to 3.49%, and the effective rate on the outstanding stock of sight deposits decreased to 1.84% in August, from 1.89% in July.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables G-I):
In August, UK non-financial businesses (PNFCs and public corporations) borrowed, on net, £3.2 billion of loans from banks and building societies (including overdrafts), following net borrowing of £5.3 billion in July. Within this measure, large non-financial businesses borrowed £3.4 billion, following net borrowing of £4.6 billion in July. Small and medium-sized non-financial businesses (SMEs), on net, repaid £0.2 billion in August, compared to £0.7 billion of net borrowing in July.
The annual growth rate of borrowing by large businesses increased to 8.6% in August, from 8.1% in July. The annual growth rate of borrowing by SMEs increased from 1.0% to 1.2%, 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 5.68% in August, from 5.80% in July. The effective interest rate on new loans to SMEs decreased by 6 basis points, to 6.35%.
Net Finance Raised (M&C Table F):
PNFCs raised, on net, £5.9 billion of finance in August, following net borrowing of £0.4 billion in July. This was driven by £4.1 billion of net borrowing through loans from banks and building societies. These were partially offset by £1.1 billion of net bond redemptions and £0.7 billion of net equity buybacks (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In August, UK non-financial businesses withdrew, on net, £2.8 billion from banks and building societies in all currencies, following net withdrawals of £0.2 billion in July. The effective rate on new time deposits from PNFCs fell by 16 basis points to 3.54% in August, and the effective rate on stock sight deposits fell by 13 basis points to 2.12% 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 £10.9 billion in August, compared to £6.7 billion in July. Within this, households increased their holdings of money by £5.4 billion and NIOFCs increased theirs by £5.0 billion. Additionally, PNFCs also increased their holdings of money by £0.6 billion.
The flow of sterling net lending to private sector companies and households (M4Lex) was £10.0 billion in August, compared to £7.8 billion in July. This was driven by increases of £4.7 billion, £3.5 billion and £1.8 billion in net lending to households, PNFCs, and NIOFCs respectively.
Queries
If you have any comments or queries about this release, please email DSD_MS@bankofengland.co.uk.
Next release date: 29 October 2025
