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.
- Net borrowing of mortgage debt by individuals amounted to £5.9 billion in January. Mortgage approvals for house purchases rose to 74,000 in January, above the 12-month pre-pandemic average up to February 2020 of 66,700.
- Consumers borrowed an additional £0.6 billion in consumer credit, on net. The effective rate on new personal loans fell by 6 basis points, to 6.21% in January.
- Sterling money (known as M4ex) increased by £10.2 billion in January. Households’ holdings of money strengthened with net flows of £7.7 billion, compared with £2.7 billion in December.
- The effective interest rate paid on individuals’ new time deposits with banks and building societies rose by 31 basis points to 0.67%.
- Large businesses borrowing from banks rose to £1.7 billion in January, whilst small and medium sized businesses repaid £0.8 billion. Private non-financial companies (PNFCs) raised £0.6 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 £5.9 billion in January, from £4.0 billion in December (Chart 1). This is above the pre-pandemic average of £4.3 billion in the 12 months up to February 2020, and the highest since September 2021 (£9.4 billion). Gross lending rose to £23.8 billion in January, from £22.0 billion in December. Gross repayments also rose slightly to £18.3 billion in January from £18.0 billion in December.
Approvals for house purchases, an indicator of future borrowing, rose to 74,000 in January, above the 12-month average up to February 2020 of 66,700 and the highest since July 2021 (75,900). Approvals for remortgaging (which only capture remortgaging with a different lender) also rose, to 46,200 in January. This remains below to the 12-month average up to February 2020 of 49,500, but is the highest since February 2020 (52,300).
Chart 1: Mortgage lending
Seasonally adjusted flows
The ‘effective’ interest rate – the actual interest rate paid – on newly drawn mortgages was unchanged at 1.58% in January. The rate on the outstanding stock of mortgages was broadly unchanged from a series low in December, ticking up 1 basis point to 2.01% in January.
Consumer credit (M&C Tables B and C):
Individuals borrowed £0.6 billion in consumer credit in January, on net (Chart 2). This is lower than the average of £1.0 billion in the 12 months up to February 2020. This was split between £0.1 billion of additional borrowing on credit cards, and £0.5 billion in borrowing in other forms of consumer credit (such as car dealership finance and personal loans).
The annual growth rate for all consumer credit increased to 3.2% in January from 1.5% in December. The annual growth rates of credit cards and other forms of consumer credit were 6.2% and 2.0% respectively.
Chart 2: Consumer credit
The effective interest rate on interest-charging overdrafts in January rose 30 basis points to 20.83%. Rates on new personal loans to individuals fell by 6 basis points, to 6.21% in January - this was 82 basis points below the January 2020 level. The cost of credit card borrowing was 18.28% in January, 27 basis points below the February 2020 level.
Households’ deposits (M&C Table J):
Households deposited an additional £7.7 billion with banks and building societies in January. In addition, households deposited £0.1 billion into National Savings and Investment (NS&I) accounts in January, 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 December (£7.8 billion) compares to an average monthly net flow of £9.4 billion in the twelve months to December 2021 (Chart 3). However, the combined January net flow was higher 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 from 0.36% in December to 0.67% in January, an increase of 31 basis points. The rate on the outstanding stock of time deposits rose by 5 basis points to 0.38%. 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):
UK non-financial businesses (PNFCs and public corporations) borrowed £1.0 billion from banks in January, on net, compared to a net repayment of £0.6 billion in December. Net borrowing by large non-financial businesses was £1.8 billion in January, compared to £0.1 billion in December. Small and Medium sized non-financial businesses (SMEs) repaid £0.8 billion, on net, rising from a £0.7 billion net repayment in December.
The annual growth rate of borrowing by large businesses increased to 2.4% in January from 1.9% in December, the highest annual growth rate since August 2020 (4.0%) (Chart 4).
The average cost of new borrowing from banks by PNFCs was broadly unchanged at 2.02% in January. The rate in January was above the average seen since March 2020 (1.94%).
The net loan repayment of £0.8 billion by SMEs in January was the eleventh month in a row of net repayments. The annual growth rate fell to -4.4%, equal to the series low in September 2012 (the series began in April 2012).
Interest rates on new loans to SMEs fell 12 basis points to 2.40% in January, remaining well below January 2020 rates (3.37%).
Chart 4: Annual growth of lending to SMEs and large businesses
Market Finance (M&C Table F):
Private non-financial companies raised a net £0.6 billion of market finance (the sum of net equity, bond and commercial paper issuance) in January (Chart 5), an increase from the £3.3 billion net redemption in December. There was a net redemption of £0.9 billion in equity, which was more than offset by issuances of £0.6 billion and £1.0 billion in bonds and commercial paper respectively.
Chart 5: Net finance raised by PNFCs(a)
Seasonally adjusted net flow
- (a) There is a discrepancy between the total of net finance raised and its components due to the seasonal adjustment methodology.
In January, UK non-financial businesses withdrew £11.1 billion, on net, from banks and building societies in all currencies, compared to a net deposit of £1.8 billion in December.
The effective rate on new time deposits increased by 9 basis points to 0.20% and the effective rate on stock sight deposits increased by 2 basis points, to 0.07%.
Aggregate money (M4ex) and lending (M4Lex) (M&C Table J)
Sterling money (known as M4ex) increased by £10.2 billion in January, compared to a £0.5 billion decrease in December. Households’ holdings of money strengthened with net flows of £7.7 billion compared with £2.7 billion in December, and rising above the average of £4.7 billion in the twelve months to February 2020. PNFCs’ holdings of money strengthened with net flows of £6.0 billion, compared to a decrease of £0.1 billion in December.
Sterling net lending to private sector companies and households, or M4Lex, rose to £5.5 billion in January, from £3.1 billion of lending in December.