Money and Credit - November 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 04 January 2022

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 amounted to £3.7 billion in November. Mortgage approvals for house purchase were relatively unchanged at 67,000 in November, close to the 12-month average up to February 2020 of 66,700.
  • The effective interest rate on newly drawn mortgages fell to a new series low of 1.50%, whilst the rate on the outstanding stock of mortgages also fell to a new series low of 2.02%.
  • Consumers borrowed an additional £1.2 billion in consumer credit, on net. The effective rate on new personal loans increased to 6.43% in November, and is the highest since March 2020 but remains below the January 2020 level.
  • Households’ net flow into deposit accounts fell in November to £4.5 billion. The effective interest rate paid on individuals’ new time deposits with banks and building societies rose to 0.37%.
  • Large businesses borrowed £2.8 billion in loans from banks in November, whilst small and medium sized businesses repaid £0.8 billion. Private non-financial companies (PNFCs) redeemed £1.0 billion in net finance from capital markets.

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):

Net borrowing of mortgage debt by individuals increased to £3.7 billion in November, from £1.1 billion in October. November’s increase follows low net lending figures in October after borrowing was brought forward to September to take advantage of stamp duty land tax relief, before it was completely phased out. The net borrowing in November was however £2.9 billion below the 12-month average to June 2021, when the full stamp duty holiday was in effect. Gross lending increased to £22.1 billion in November, from £19.5 billion in October. Gross repayments rose to £19.4 billion from £18.2 billion in October (Chart 1).

Approvals for house purchases, an indicator of future borrowing, remained relatively unchanged at 67,000 in November, the lowest since June 2020 (40,500) but close to the 12-month average up to February 2020 of 66,700. Approvals for remortgaging (which only capture remortgaging with a different lender) rose to 44,500 in November. This remains low compared to the 12-month average up to February 2020 of 49,500, but is the highest since February 2020 (52,500).

Chart 1: Mortgage lending

Seasonally adjusted flows

The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages fell 9 basis point to 1.50% in November, which is a new series low. The rate on the outstanding stock of mortgages ticked down 1 basis point to a new series low of 2.02%.

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

Individuals borrowed £1.2 billion in consumer credit in November, on net. The majority of this was £0.9 billion of additional borrowing on credit cards, which is the strongest net borrowing since July 2020 (Chart 2). Individual borrowing in other forms of consumer credit (such as car dealership finance and personal loans) amounted to £0.4 billion of net lending.

The annual growth rate for all consumer credit increased to 0.4% in November from -1.0% in October, the first positive growth rate since March 2020. The annual growth rates of credit cards and other forms of consumer credit were -0.2% and 0.6% respectively.

Chart 2: Consumer credit

Seasonally adjusted

The effective interest rate on interest-charging overdrafts in November rose 27 basis points to 20.94%, a new series high. Rates on new personal loans to individuals increased by 16 basis points, to 6.43% in November, the highest since March 2020 (6.43%) but remains 60 basis points below the January 2020 level. The cost of credit card borrowing was 17.92% in November, having ranged between 17.5% and 18.5% since March 2020.

Households’ deposits (M&C Table J):

Households deposited an additional £4.5 billion with banks and building societies in November. In addition, households deposited £0.2 billion into National Savings and Investment (NS&I) accounts in November, which are not captured within household deposits with banks and building societies but can act as a substitute for them. The combined net flow into both deposits and NS&I accounts in November (£4.7 billion) compares to an average net flow of £11.2 billion in the twelve months to October 2021 (Chart 3). The combined November net flow was slightly lower than pre-pandemic flows; in the year to February 2020, the average net flow was £5.5 billion.

Chart 3: Households’ deposits

Seasonally adjusted net flow

The effective interest rate paid on individuals’ new time deposits with banks and building societies rose 1 basis point to 0.37% in November, the highest since April 2021 (0.46%). The effective interest rate on the outstanding stock of time deposits remained stable at a series low of 0.34%. The effective rates on stock sight deposits remained at a series low of 0.09%.

Lending to and deposits from businesses

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

Net borrowing of bank loans by UK non-financial businesses (PNFCs and public corporations) was £2.1 billion in November, compared to £0.6 billion in October. Net borrowing by large non-financial businesses was £2.9 billion in November, compared to £2.1 billion in October. Small and Medium sized non-financial businesses (SMEs) repaid £0.8 billion, on net, falling from a £1.5 billion net repayment in October.

The annual growth rate of borrowing by all large businesses increased to 1.4% in November from 0.9% in October.

The average cost of new borrowing from banks by all PNFCs rose by 16 basis points to 2.05% in November. The rate in November was above the average seen since March 2020 (1.93%).

The net loan repayment by SMEs of £0.8 billion in November was the eighth month in a row of net repayments by SMEs. The annual growth rate fell to -3.3% in November, the lowest since May 2013.

Interest rates on new loans to SMEs rose by 21 basis points to 2.64% in November, however remaining well below January 2020 rates (3.37%).

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

Seasonally adjusted

Market Finance (M&C Table F):

Private non-financial companies redeemed a net £1.0 billion of market finance in November (Chart 5). There was a net redemption of bonds of £0.7 billion in November, whilst equity and commercial paper saw net redemptions of £0.2 billion and £0.1 billion, respectively.

Chart 5: Net finance raised by PNFCsfootnote [1]

Seasonally adjusted net flow

Businesses’ deposits:

In November, UK non-financial businesses deposited £12.7 billion, on net, with banks and building societies in all currencies, compared to a net withdrawal of £5.2 billion in October.

The effective rates on new time deposits and stock sight deposits remained unchanged at 0.10% and 0.04% respectively.

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

Sterling money (known as M4ex) increased by a net £12.9 billion in November, down from £14.8 billion in October. Households’ holdings of money weakened with net flows of £4.5 billion compared with £5.2 billion in October, although remained above the average of £4.7 billion in the twelve months to February 2020. PNFCs’ holdings increased by £4.3 billion, compared to £1.1 billion in October.

Sterling net lending to private sector companies and households, or M4Lex, fell in November from £11.8 billion in lending to a net repayment of £0.4 billion.

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

Queries

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

Next release date: 1 February 2022

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