Money and Credit - May 2025

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 £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April.
• Net mortgage approvals for house purchases increased by 2,400 to 63,000 in May. Approvals for remortgaging also increased by 6,200 to 41,500 in May, which is the largest increase since February 2024 (6,600).
• Net borrowing of consumer credit by individuals was £0.9 billion in May, down from £1.9 billion in the previous month. Within this, net borrowing through credit cards decreased to £0.1 billion in May, from £1.2 billion in April. Net borrowing through other forms of consumer credit decreased slightly to £0.7 billion, from £0.8 billion over the same period.
• Private non-financial corporations (PNFCs) borrowed, on net, £1.0 billion of finance in May, following net repayments of £2.3 billion in April.
• The net flow of sterling money (known as M4ex) was £5.2 billion in May, compared to £4.0 billion in April. Within this, NIOFCs and households increased their holdings of money by £4.7 billion and £4.3 billion respectively. By contrast, PNFCs decreased their holdings of money by £3.8 billion in May.
• The flow of sterling net lending to private sector companies and households (M4Lex) was £8.4 billion in May, compared to £1.4 billion in April. May’s lending was driven by increases of £3.5 billion, £2.5 billion, and £2.4 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 increased by £2.8 billion to £2.1 billion in May, following a large decrease in net borrowing of £13.8 billion to -£0.8 billion in April. The annual growth rate for net mortgage lending increased slightly from 2.5% to 2.6% in May. Gross lending increased to £20.4 billion in May, from £16.9 billion in April. Gross repayments decreased in May to £17.6 billion, from £18.2 billion.

Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, increased by 2,400 to 63,000 in May. This was the first increase since December 2024. Approvals for remortgaging (which only capture remortgaging with a different lender) also increased in May, by 6,200 to 41,500. This is the largest increase since February 2024 (6,600) (Chart 1).

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased to 4.47% in May from 4.49% in April. However, the rate on the outstanding stock of mortgages increased slightly, to 3.87% from 3.86%.

Consumer credit (M&C Tables B and C):

In May, net borrowing of consumer credit by individuals decreased to £0.9 billion, from £1.9 billion in the previous month (Chart 2). Within this, net borrowing through credit cards decreased to £0.1 billion in May, from £1.2 billion in April. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) decreased slightly to £0.7 billion, from £0.8 billion over the same period.

The annual growth rate for all consumer credit decreased to 6.5% in May, from 6.7% in April. Over the same period, the annual growth rate for credit card borrowing decreased to 9.2% from 9.9%, and the annual growth rate for other forms of consumer credit remained stable at 5.3%.

The effective interest rate on interest-charging overdrafts decreased by 7 basis points, to 22.28% in May. The effective rate on interest-charging credit cards increased by 9 basis points, to 21.54%. The effective rate on new personal loans to individuals increased by 3 basis points, to 8.72%.

Households’ deposits (M&C Table J):

Households’ deposits with banks and building societies increased by £4.3 billion in May, following net deposits of £2.8 billion in April. This was driven by households depositing an additional £3.9 billion into ISAs and £1.1 billion into non-interest bearing sight accounts. There was some offset due to the withdrawal of £2.4 billion from interest-bearing sight accounts and £1.9 billion from interest-bearing time accounts (Chart 3).

The effective interest rate paid on individuals’ new time deposits with banks and building societies fell by 10 basis points, to 3.92% in May. The effective rate on the outstanding stock of time deposits remained stable at 3.61%, and the effective rate on the outstanding stock of sight deposits decreased to 1.96% from 1.99% in April.

Lending to and deposits from businesses

Businesses’ borrowing from banks (M&C Tables G-I):

In May, UK non-financial businesses (PNFCs and public corporations) borrowed, on net, £8.6 billion of loans from banks and building societies (including overdrafts), following £1.2 billion of net borrowing in April. This was the largest amount of net borrowing since April 2020 (£15.9 billion). Within this measure, large non-financial businesses borrowed, on net, £8.2 billion, compared to £1.3 billion of net borrowing in April. Small and medium-sized non-financial businesses (SMEs) borrowed, on net, £0.4 billion, compared to flat net borrowing in April.

The annual growth rate of borrowing by large businesses increased to 8.4% in May from 5.9% in April, and was the highest since September 2022 (9.1%). The annual growth rate of borrowing by SMEs increased for the 14^th consecutive month, rising from -0.8% to -0.2% (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 significantly to 5.60% in May, from 6.39% in April. The effective interest rate on new loans to SMEs decreased, by 25 basis points, to 6.54%.

Net Finance Raised (M&C Table F):

PNFCs borrowed, on net, £1.0 billion of finance in May, following net repayments of £2.3 billion in April. This was driven by £6.1 billion of net borrowing through loans from banks and building societies. This was partially offset by £2.2 billion of net equity buybacks and £1.1 billion of net bond redemptions (Chart 5).

Businesses’ deposits:

In May, UK non-financial businesses deposited £4.6 billion with banks and building societies in all currencies, following net withdrawals of £7.0 billion in April. The effective rate on new time deposits from PNFCs fell by 13 basis points to 3.77% in May, and the effective rate on stock sight deposits decreased, to 2.29%, from 2.39% 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 £5.2 billion in May, compared to £4.0 billion in April. Within this, NIOFCs and households increased their holdings of money by £4.7 billion and £4.3 billion respectively. By contrast, PNFCs decreased their holdings of money by £3.8 billion in May.

The flow of sterling net lending to private sector companies and households (M4Lex) was £8.4 billion in May, compared to £1.4 billion in April. May’s lending was driven by increases of £3.5 billion, £2.5 billion, and £2.4 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 July 2025