Money and Credit - November 2018

These monthly statistics on borrowing and deposits by households and businesses are used by the Bank’s policy committees to understand economic trends and developments in the banking system.
Published on 04 January 2019

Key points

  • Consumers borrowed an additional £0.9 billion to spend on goods and services in November, in line with the average since July. The annual growth rate of consumer credit slowed further in November, to 7.1%.
  • Overall, businesses did not borrow much money from banks and capital markets in November: the highest borrowing from banks since July 2017 was offset by net redemptions of bonds.
  • Within household money, the relative strength of sight deposits compared to time deposits continued in November.

References in the text point to the summary tables below. For further statistics, please see our interactive charts and Bankstats tables.


Lending to individuals (Tables A-E)

Consumer credit (Tables B and C):

The extra amount consumers have borrowed each month to buy goods and services has slowed in the second half of 2018. Since July, the average monthly flow of consumer credit has been £0.9 billion, compared with £1.5 billion between January 2016 and June 2018. In November, the total net flow was £0.9 billion, with net credit card borrowing of £0.4 billion, and borrowing for other loans and advances of £0.5 billion.

The annual growth rate of consumer credit has been slowing gradually since the end of 2016 (Chart 1). It slowed further in November, to 7.1%, reflecting the weaker flows of new lending. This was the lowest since March 2015, and well below the peak of 10.9% in November 2016. The annual growth rate of other loans and advances was 6.6% in November, the lowest since June 2014. Growth in credit card lending has been fairly stable, but also slowed to 7.9% in November.

Chart 1: Consumer credit growth

Seasonally adjusted

Chart 1: Consumer credit growth

Mortgage lending (Tables D and E):

Mortgage market activity has been broadly stable since 2016, looking through month to month changes, and this has continued into November. Households borrowed an extra £3.5 billion secured against their homes in November, slightly lower than the £4.1 billion in October but broadly in line with the average since 2016 of £3.6 billion. The annual growth rate of mortgage lending ticked down to 3.2% in November. It has been around 3% since late 2016, and remains modest compared to the pre-crisis period. The number of mortgages approved for house purchase - which lead to future mortgage lending - fell slightly, to 63,700 in November. The number of approvals for remortgaging was broadly unchanged on the month at 48,600.

Chart 2: Mortgage approvals

Seasonally adjusted

Chart 2: Mortgage approvals

Lending to businesses (Tables F-I)

The total amount outstanding of businesses’ borrowing increased by £0.1 billion in November, following an increase of £6.2 billion in October. Businesses can raise money by borrowing from banks or from financial markets (in the form of bonds, equity and commercial paper). In November there were net redemptions of bonds of £3.8 billion, where new issuance is offset by larger repayments, following a large amount of issuance in November. Borrowing from banks remained robust, with businesses borrowing an additional £3.6 billion in November, the highest since July 2017. Commercial paper issuance was positive at £1.0 billion, while there was a net redemption of funds raised through equity for the fourth month in a row, of £1.1 billion.

Chart 3: Net finance raised by PNFCs1

Seasonally adjusted

Chart 3: Net finance raised by PNFCs

The increase in bank lending to businesses was driven by lending to large businesses, which increased by £3.3 billion in November. Bank lending to small and medium sized enterprises (SMEs) increased by £0.2 billion in November. The annual growth rate of lending to large businesses increased to 4.2% in November, while the growth rate for SMEs remained close to zero, as it has been for the past year.

1 There is a sizable discrepancy between the total net finance raised and its components due to the aggregate being seasonally adjusted separately to the components.

Broad money (Table J)

The total amount of money held by UK households, private non-financial corporations (PNFCs) and non-intermediary other financial corporations (NIOFCs) (Broad money or M4ex) increased by £3.2 billion in November. This was below the £4.7 billion average increase over the previous six months. Money held by households increased £2.5 billion, also below the average of the past six months. Within household money, the strength in sight deposits relative to time deposits continued: interest-bearing sight deposits increased £2.4 billion, while time deposits fell £1.1 billion. Money held by PNFCs increased by £1.9 billion in November, whilst money held by NIOFCs fell by £1.2 billion.