Money and Credit - April 2022

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 31 May 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 decreased to £4.1 billion in April, down from £6.4 billion in March. Mortgage approvals for house purchases also decreased to 66,000 in April from 69,500 in March. Both measures are slightly below their 12-month pre-pandemic averages up to February 2020.
  • Consumers borrowed an additional £1.4 billion in consumer credit, on net, of which £0.7 billion was new lending on credit cards.
  • Large non-financial businesses’ borrowing from banks rose to £2.7 billion in April from £1.8 billion in March, while small and medium sized businesses repaid £0.5 billion of bank loans. Private non-financial companies (PNFCs) redeemed £1.9 billion in net finance from capital markets.
  • The net flow of sterling money (known as M4ex) decreased to £1.5 billion in April compared with £24.4 billion in March. Households’ holdings of money saw net flows of £5.7 billion in April, compared with £6.6 billion in March.
  • The net flow of sterling lending to private sector or companies (known as M4Lex) decreased to -£3.4 billion in April, compared to £21.1 billion in March.

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 decreased to £4.1 billion in April from £6.4 billion in March (Chart 1). This is slightly below the pre-pandemic average of £4.3 billion in the 12 months up to February 2020. Gross lending rose slightly to £26.5 billion in April from £26.2 billion in March, while gross repayments increased to £21.5 billion in April from £20.0 billion in March.

Approvals for house purchases, an indicator of future borrowing, decreased to 66,000 in April, from 69,500 in March. This is slightly below the 12-month pre-pandemic average up to February 2020 of 66,700. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased to 47,800 in April. This remains below the 12-month pre-pandemic average up to February 2020 of 49,500.

Chart 1: Mortgage lending

Seasonally adjusted flows

The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages increased by 9 basis points to 1.82% in April. The rate on the outstanding stock of mortgages ticked up 1 basis point to 2.05% in April.

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

Individuals borrowed an additional £1.4 billion in consumer credit in April, on net, following £1.3 billion of borrowing in March (Chart 2). This is the third consecutive month where borrowing has been higher than the 12-month pre-pandemic average up to February 2020 of £1.0 billion. The additional borrowing in April of consumer credit was split between £0.7 billion on credit cards, and £0.7 billion through other forms of consumer credit (such as car dealership finance and personal loans).

The annual growth rate for all consumer credit increased to 5.7% in April from 5.2% in March; the highest rate since February 2020. The annual growth rates of credit card borrowing and other forms of consumer credit were 11.6% (the highest since November 2005) and 3.4% (the highest since March 2020), respectively.

Chart 2: Consumer credit

Seasonally adjusted

The effective interest rate on interest-charging overdrafts in April fell by 23 basis points to 20.07%. Rates on new personal loans to individuals rose by 60 basis points to 6.52% in April, though this was still 38 basis points below the February 2020 (pre-pandemic) level. The effective rate on interest bearing credit cards was 18.08% in April, 47 basis points below the February 2020 level.

Households’ deposits (M&C Table J):

Households deposited an additional £5.7 billion with banks and building societies in April. In addition, during this period households deposited £0.6 billion into National Savings and Investment (NS&I) accounts, 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 April was £6.3 billion, compared to an average monthly net flow of £5.5 billion during the 12-month pre-pandemic period up to February 2020 (Chart 3).

Chart 3: Households’ deposits

Seasonally adjusted

The effective interest rate paid on individuals’ new time deposits with banks and building societies rose from 0.92% in March to 1.09% in April, an increase of 17 basis points. The effective rate on the outstanding stock of time deposits ticked up 4 basis points to 0.45%. The effective rates on stock sight deposits remained low, at 0.15%.

Lending to and deposits from businesses

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

UK non-financial businesses (PNFCs and public corporations) borrowed £2.3 billion from banks in April (including overdrafts), on net, compared to £1.1 billion in March. Within this, net borrowing by large non-financial businesses was £2.7 billion in April, compared to £1.8 billion in March. Small and Medium sized non-financial businesses (SMEs) repaid £0.5 billion, on net, compared to a £0.7 billion net repayment in March. The net loan repayment by SMEs in April marked the twelfth consecutive month of net repayments.

The annual growth rate of borrowing by large businesses increased to 7.0% in April from 5.0% in March, the highest such rate since June 2020 (5.3%) (Chart 4). The annual growth rate of borrowing by SMEs fell to -5.3%, a new series low (the series began in April 2012).

The average cost of new borrowing from banks by UK PNFCs fell 53 basis points to an effective interest rate of 2.41% in April, and fell below the February 2020 rate of 2.56%. Effective interest rates on new loans to SMEs decreased by 64 basis points to 2.85% in April, and also fell below February 2020 rates (3.44%).

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

Seasonally adjusted

Market Finance (M&C Table F):

Private non-financial companies (PNFCs) redeemed a net £1.9 billion of market finance (the sum of net equity, bond and commercial paper issuance) in April (Chart 5), in comparison to £6.8 billion redeemed in March. Within this, net equity buybacks of £3.7 billion more than offset net issuances of £1.4 billion in bonds, and £0.4 billion in commercial paper.

Chart 5: Net finance raised by PNFCs

Seasonally adjusted