Money and Credit - June 2019

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 29 July 2019

Overview

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.

Key points:

  • The extra amount borrowed by consumers to buy goods and services was £1.0 billion in June, in line with the average of the past year.
  • UK businesses raised £3.3 billion of net finance in June, primarily reflecting borrowing from banks.
  • The total amount of money held by PNFC’s fell by £4.1 billion, the largest fall since April 2016.

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 additional amount borrowed by consumers to buy goods and services was £1.0 billion in June, compared with £0.9 billion in May. Within this, net borrowing for other loans and advances increased on the month to £0.8 billion, the highest since April. Credit card lending was £0.3 billion.

The annual growth rate of consumer credit continued to slow in June, falling to 5.5%. Annual growth has fallen steadily since its peak in late 2016, and particularly over the past year reflecting a fall in the average monthly net flow of consumer credit. Since July last year, the net flow has averaged £1.0 billion per month, compared with £1.5 billion per month in the year to June 2018.

Chart 1: Consumer credit

Seasonally adjusted

Chart 1: Consumer credit

Mortgage lending (Tables D and E):

Net mortgage borrowing by households was £3.7 billion, close to the average of the previous three years. This followed a slightly weaker net flow of £2.9 billion in May. The annual growth rate of mortgage lending remained stable at 3.1%, around the level that it has been at since 2016.

Mortgage approvals for house purchase (an indicator of future lending) increased by around 800 in June to 66,400 and the number of approvals for remortgaging rose slightly to 47,000. Notwithstanding these small rises, mortgage approvals remained within the narrow ranges seen over the past three years.

Lending to businesses (Tables F-I)

Businesses can raise money by borrowing from UK banks (in the form of loans) or financial markets (in the form of bonds, equity and commercial paper). The additional amount they borrowed from these sources was £3.3 billion in June, compared with £1.8 billion in May.

Borrowing from banks increased by £2.5 billion in June. During the first half of 2019, borrowing has been stronger than the same period in 2018, and the annual growth rate has, therefore, risen. For non-financial businesses, the growth rate rose to 4.4%. Within this, the growth rate of borrowing by large business rose to 6.4%; and the growth of SME borrowing rose to 0.8%, its highest since August 2017.

Businesses’ net bond issuance (a form of longer-term borrowing from financial markets) fell slightly to £1.4 billion, though it remained higher than the previous six month average. Net commercial paper issuance (a form of short-term borrowing from financial markets) fell by £1.0 billion, remaining weak for a fourth consecutive month.

Chart 2: Net financed raised by PNFCs

Seasonally adjusted

Chart 2: Net financed raised by PNFCs
  • There is a discrepancy between the total of net finance raised and its components due to the seasonal adjustment methodology.

Broad money (Table J)

Broad money (M4ex) is a measure of the total amount of money held by households, non-financial businesses (PNFC’s) and financial corporations that do not act to intermediate financial transactions. In June, money holdings rose by £2.0 billion, slightly lower than in the past few months. Within this, the total amount of money held by PNFC’s fell by £4.1 billion, the largest fall in a single month since April 2016. The total money held by households rose by £5.1 billion, primarily due to an increase in interest bearing sight deposits and ISA’s. Household money holdings increased by a similar amount to recent months.

Chart 3: Broad money by sector

Seasonally adjusted

Chart 3: Broad money by sector

More information

PDF Summary tables

PDF Highs and lows

Next release date: 30 August 2019

View interactive charts

Further details about our data

Queries

If you have any comments or queries about this release please email dsd_ms@bankofengland.co.uk.

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