Money and Credit - February 2021

Our monthly Money and Credit statistical release is made up of three parts: broad money and credit, lending to individual and lending to businesses.
Published on 29 March 2021


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 banking system.

Key points

  • Net mortgage borrowing was £6.2 billion in February, the strongest since March 2016. Mortgage approvals for house purchase were 87,700 in February: while higher than in February 2020, they have fallen from a peak of 103,700 in November 2020.
  • Individuals continued making net repayments of consumer credit in February (£1.2 billion). The effective rate on new personal loans remained low at 5.16%, compared to 7.03% in January 2020.
  • Private non-financial companies borrowed £0.7 billion from capital markets in February, compared to a monthly average of £4.5 billion since March 2020. Net bank borrowing by small and medium sized businesses was £0.4 billion in February, whilst large businesses made net repayments of £0.3 billion.
  • Households continued depositing significant amounts, with an additional £17.1 billion placed in February. Deposit interest rates remained at historically low levels.

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 individuals

Mortgage lending (M&C Tables D and E):

Mortgage borrowing strengthened in February with individuals borrowing an additional £6.2 billion secured on their homes. This was supported by the expected ending of the temporary stamp duty tax relief at the end of March, which has now been extended to end of June. February saw the strongest net borrowing since March 2016 (£7.2 billion), when borrowing was also boosted by changes in stamp duty. The strength on the month reflected higher gross lending of £27.7 billion, close to March 2016 (£27.9 billion).

The strength in mortgage borrowing follows a large number of approvals for house purchase. In February, there were 87,700, which - while down from a peak of 103,700 in November 2020 - was well above the monthly average in the six months to February 2020 (67,300) (Chart 1). Approvals for remortgage (which only capture remortgaging with a different lender) rose slightly to 34,300 from 32,600 in January 2021.

The ‘effective’ rate – the actual interest rates paid – on newly drawn mortgages rose 6 basis points to 1.91% in February. That is slightly higher than the rate in January 2020 (1.85%), and compares with a series low of 1.72% in August 2020. The rate on the outstanding stock of mortgages remained at series low (2.09%)

Chart 1: Mortgage approvals

Seasonally adjusted net flow

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

Individuals continued making net repayments of consumer credit in February (£1.2 billion). This is a slightly smaller net repayment than the average of £1.8 billion since March 2020 (Chart 2). As a result of the further repayment, the annual growth rate fell to -9.9%, a new series low since it began in 1994.

Within consumer credit, the weakness on the month reflected net repayments on credit cards (£0.9 billion) with some repayments of other forms of consumer credit (£0.3 billion). The annual growth rates of both components fell further, to -21.0% and -4.8%, respectively. Both represent new series lows.

Chart 2: Consumer credit

Seasonally adjusted

The effective interest rate on interest-charging overdrafts fell by 45 basis points to 20.37% in February, within the 20-21% range seen since September 2020. Rates on new personal loans to individuals fell to 5.16% and remain low compared to an interest rate of 7.03% in January 2020. The cost of credit card borrowing rose by 15 basis points to 18.18% in February, the highest since May 2020.

Households’ deposits (M&C Table J):

Households’ flows into deposit-like accounts remained strong in February. The net flow of deposits remained strong at £17.1 billion, compared to the monthly average of £15.0 billion since March 2020. There was a small withdrawal (£1.4 billion) from National Savings and Investment (NS&I) accounts in February, which are not captured within household deposits but can act as a substitute for them. The combined flow into both deposits and NS&I accounts in February (£15.8 billion) was similar to January but remained well above the monthly average of £5.6 billion in the six months to February 2020.

The effective interest rate paid on individuals’ new time deposits with banks fell to 0.34%, a new series low since the series began in 2016. The effective rates on the outstanding stock of both sight and time deposits were broadly flat, at 0.12% and 0.48%, respectively. The rate on the stock of sight deposits remains the lowest since the series began.

Lending to and deposits from businesses

Market Finance (M&C Table F):

Private non-financial companies (PNFCs) raised £0.7 billion from financial markets in February, down from £4.1 billion in January (Chart 3). This compares to the monthly average of £4.5 billion since March 2020. The lower net issuance in February reflected higher gross repayments than in January. Net issues of equities and bonds were £1.1 billion and £0.2 billion, respectively. There was a net redemption of commercial paper of £0.5 billion, following net issuance of £1.1 billion in January.

Chart 3: Net finance raised by PNFCs1

Seasonally adjusted net flow


  • There is a discrepancy between the total of net finance raised and its components due to the seasonal adjustment methodology.

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

Overall, non-financial corporates repaid £0.2 billion of bank loans in February. The average cost of new borrowing from banks by all PNFCs rose by 126 basis points, to 2.96%. This is the highest interest rate since September 2019, which compares against a series low of 1.05% in May 2020. The increase in February was driven by a 140 basis points increase on the cost of floating-rate loans – which account for the majority of corporate borrowing – to 3.14% whilst the cost of fixed rate loans (1.66%) remains 186 basis points lower than in January 2020.

Borrowing by small and medium sized non-financial businesses (PNFCs and public corporations) in February was similar to recent months, as they drew down an extra £0.4 billion in loans. The annual growth rate was very close to its series high at 25.7% (Chart 4). Interest rates on new loans to SMEs bounced back to 2.38% in February. This remains, however, well below the rate of 3.37% in January 2020.

Large non-financial businesses continued making net repayments in February (£0.3 billion). This followed the trend of net repayments, but a significantly smaller repayment than seen during much of 2020. The annual growth rate of borrowing by all large businesses was -1.2%.

Chart 4: Annual growth of lending to SMEs and large businesses

Seasonally adjusted

Businesses deposits with banks:

The amount of deposits held by UK businesses in all currencies fell by £3.8 billion in February (Chart 5). This net outflow was very similar to previous years: in February 2020 deposits fell by £3.2 billion. In contrast, for much of 2020 businesses were depositing significantly more than usual: between March and December the average monthly flow was £17.3 billion. The effective rates on new time deposits and stock sight deposits for PNFCs remained broadly unchanged at very low levels in February, at 0.06% and 0.05%, respectively.

Chart 5: UK businesses deposits

Not seasonally adjusted net flow

Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)

Sterling money (known as M4ex) increased by £15.8 billion in February, down from £31.1 billion in January. PNFCs’ holdings of money (on a seasonally adjusted basis) increased by £1.2 billion, down from £13.8 billion in January whilst households’ holdings remained strong with net flow of £17.1 billion.Sterling net lending to private sector companies and households, or M4Lex, was -£7.7 billion in February, down from -£3.8 billion in January.


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Next release date: 4 May 2021

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