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 by £3.1 billion to £5.3 billion in June, compared to a £2.8 billion increase to £2.2 billion of net borrowing in May.
- Net mortgage approvals for house purchases increased by 900, to 64,200 in June. Approvals for remortgaging also increased by 200, to 41,800 in June. This marked the highest number of approvals for remortgaging since October 2022 (50,000).
- Net borrowing of consumer credit by individuals rose to £1.4 billion, from £0.9 billion in the previous month. Within this, net borrowing through credit cards increased to £0.7 billion in June, from £0.2 billion in May. Net borrowing through other forms of consumer credit remained broadly unchanged at £0.7 billion over the same period.
- The annual growth rate of borrowing by large businesses decreased to 6.7% in June. The annual growth rate of borrowing by SMEs increased from -0.2% to 0.3%, the first month of positive growth rate since August 2021 (1.3%).
- Private non-financial corporations (PNFCs) borrowed, on net, £1.0 billion of finance in June, following net borrowing of £1.2 billion in May.
- The net flow of sterling money (known as M4ex) was £11.3 billion in June, compared to £5.6 billion in May. Within this, households increased their holdings of money by £7.8 billion, which was mainly driven by households depositing an additional £3.6 billion into ISAs and £1.2 billion into interest bearing sight accounts. NIOFCs and PNFCs also increased their holdings of money, by £2.5 billion and £1.0 billion respectively.
- The flow of sterling net lending to private sector companies and households (M4Lex) was £18.9 billion in June, compared to £8.5 billion in May. This was the highest net lending since September 2022 (£25.2 billion), and was driven by increases of £10.3 billion, £5.0 billion, and £3.5 billion in net lending to NIOFCs, households and PNFCs, 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 increased by £3.1 billion to £5.3 billion in June, compared to a £2.8 billion increase of net borrowing to £2.2 billion in May. The annual growth rate for net mortgage lending rose from 2.6% to 2.8% in June. Gross lending increased to £23.9 billion in June, from £20.6 billion in May. Gross repayments also rose in June, to £18.8 billion, from £17.6 billion.
Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 900 to 64,200 in June. Approvals for remortgaging (which only capture remortgaging with a different lender) also increased, by 200, to 41,800 in June. This marked the highest number of approvals for remortgaging since October 2022 (50,000) (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased for the fourth consecutive month, to 4.34% in June from 4.47% in May. However, the rate on the outstanding stock of mortgages increased slightly, to 3.88% from 3.87%.
Consumer credit (M&C Tables B and C):
In June, net borrowing of consumer credit by individuals rose to £1.4 billion, from £0.9 billion in the previous month (Chart 2). Within this, net borrowing through credit cards increased to £0.7 billion in June, from £0.2 billion in May. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) remained broadly unchanged, at £0.7 billion over the same period.
The annual growth rate for all consumer credit increased to 6.7% in June, from 6.5% in May. Over the same period, the annual growth rate for credit card borrowing rose to 9.7% from 9.3%, and the annual growth rate for other forms of consumer credit slightly increased to 5.4% from 5.3%.
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts decreased by 5 basis points, to 22.23% in June. Similarly, the effective rate on interest-charging credit cards decreased by 5 basis points, to 21.49%. The effective rate on new personal loans to individuals decreased by 30 basis points, to 8.42%.
Households’ deposits (M&C Table J):
Households’ deposits with banks and building societies increased by £7.8 billion in June from May, following net increase of £4.3 billion in May from April. This was mainly driven by households depositing an additional £3.6 billion into ISAs and £1.2 billion into 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 increased by 10 basis points, to 4.02% in June. The effective rate on the outstanding stock of time deposits fell by 4 basis points to 3.57%, and the effective rate on the outstanding stock of sight deposits decreased to 1.91% in June from 1.96% in May.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables G-I):
In June, UK non-financial businesses (PNFCs and public corporations) repaid, on net, £2.5 billion of loans to banks and building societies (including overdrafts), compared with £8.6 billion of net borrowing in May. Within this measure, large non-financial businesses repaid, on net, £2.8 billion, compared to £8.3 billion of net borrowing in May. This was the highest net repayment from large businesses since June 2023 (-£6.5 billion). Net borrowing from small and medium-sized non-financial businesses (SMEs) remained unchanged at £0.4 billion from May to June.
The annual growth rate of borrowing by large businesses decreased to 6.7% in June, from 8.5% in May. The annual growth rate of borrowing by SMEs increased from -0.2% to 0.3%, the first month of positive growth rate 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 increased to 5.94% in June, from 5.60% in May. The effective interest rate on new loans to SMEs decreased by 3 basis points, to 6.51%.
Net Finance Raised (M&C Table F):
PNFCs raised, on net, £1.0 billion of finance in June, following net borrowing of £1.2 billion in May. This was driven by £4.9 billion of net borrowing through loans from banks and building societies, and £0.6 billion of net commercial paper issuances. These were partially offset by £2.0 billion of net equity buybacks, and £1.5 billion of net bond redemptions (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In June, UK non-financial businesses deposited net £2.3 billion with banks and building societies in all currencies, following net deposits of £4.8 billion in May. The effective rate on new time deposits from PNFCs fell by 3 basis points to 3.74% in June, and the effective rate on stock sight deposits decreased, to 2.25%, from 2.29% 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 £11.3 billion in June, compared to £5.6 billion in May. Within this, households increased their holdings of money by £7.8 billion. Additionally, NIOFCs and PNFCs also increased their holdings of money, by £2.5 billion and £1.0 billion respectively.
The flow of sterling net lending to private sector companies and households (M4Lex) was £18.9 billion in June, compared to £8.5 billion in May. This was the highest net lending since September 2022 (£25.2 billion). This was driven by increases of £10.3 billion, £5.0 billion, and £3.5 billion in net lending to NIOFCs, households 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 September 2025
