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 remained unchanged when compared to November at £4.6 billion in December.
- In December, net mortgage approvals for house purchase fell by 3,100 to 61,000. By contrast, approvals for remortgaging rose by 1,600 to 38,400 in December.
- Net borrowing of consumer credit by individuals decreased to £1.5 billion in December from £2.1 billion in November. Within this, net borrowing through credit cards was £0.7 billion in December, down from £1.0 billion in November. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) decreased in December, to £0.8 billion from £1.2 billion.
- Private non-financial corporations (PNFCs) repaid, on net, £1.4 billion to capital markets and banks and building societies in December, following net borrowing of £6.0 billion in November.
- The net flow of sterling money (known as M4ex) was £13.2 billion in December, compared to £16.7 billion in November
.This was driven by households, non-intermediate other financial corporations (NIOFCs) and PNFCs increasing their holdings of money by £4.8 billion, £4.5 billion, and £3.8 billion respectively. - The flow of sterling net lending to private sector companies and households (M4Lex) was £12.6 billion in December, compared to £16.1 billion in the previous month. December’s lending was driven by households, PNFCs and NIOFCs borrowing £5.5 billion, £4.7 billion, and £2.3 billion respectively.
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 and deposits from individuals
Mortgage lending (M&C Tables D and E):
Net borrowing of mortgage debt by individuals remained unchanged when compared to November at £4.6 billion in December. In December, gross lending decreased by £0.5 billion to £23.0 billion, while gross repayments decreased by £0.6 billion to £18.8 billion. The annual growth rate for net mortgage lending remained unchanged at 3.4% in December.
Net mortgage approvals (that is, approvals net of cancellations) for house purchase, which is an indicator of future borrowing, fell by 3,100 to 61,000 in December. By contrast, approvals for remortgaging (which only capture remortgaging with a different lender) rose by 1,600 to 38,400 in December (Chart 1).
Chart 1: Mortgage approvals
Seasonally adjusted
The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased to 4.15% in December from 4.20% in November. The rate on the outstanding stock of mortgages was 3.92% in December, up from 3.90% in the previous month.
Consumer credit (M&C Tables B and C):
Net borrowing of consumer credit by individuals decreased to £1.5 billion in December from £2.1 billion in November (Chart 2). Net borrowing through credit cards decreased to £0.7 billion in December, from £1.0 billion in November. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) decreased in December, to £0.8 billion from £1.2 billion.
The annual growth rate for all consumer credit remained unchanged at 8.2% in December. Over the same period, the annual growth rate for credit card borrowing increased to 12.4% from 12.1%, the highest since January 2024 (12.5%), while the annual growth rate for other forms of consumer credit was unchanged at 6.4%, the highest since September 2024 (6.6%).
Chart 2: Consumer credit
Seasonally adjusted
The effective interest rate on interest-charging overdrafts decreased by 25 basis points to 21.32% in December. The effective rate on new personal loans to individuals increased for the fifth consecutive month, to 8.78% in December from 8.68% in November. The effective rate on interest-charging credit cards decreased in December, to 21.56% from 21.60%.
Households’ deposits (M&C Table J):
Households deposited an additional £4.8 billion with banks and building societies in December, down from £8.8 billion in November. This was driven by households depositing an additional £5.2 billion into ISAs and £5.1 billion into interest-bearing sight deposit accounts (Chart 3). These inflows were offset by withdrawals of £1.8 billion and £0.1 billion from non-interest-bearing sight deposit accounts and interest-bearing time deposit accounts respectively.
Chart 3: Breakdown of households’ deposits (Household M4)
Seasonally adjusted net flow
The effective interest rate paid on individuals’ new time deposits with banks and building societies decreased to 3.76% in December from 3.81% in November. The effective rate on the outstanding stock of time deposits was 3.35% in December, down from 3.36% in the previous month, continuing the downward trend observed since September 2024. The effective rate on the outstanding stock of sight deposits remained unchanged at 1.75% in December.
Lending to and deposits from businesses
Businesses’ borrowing from banks (M&C Tables G-I):
In December, UK non-financial businesses – private non-financial companies (PNFCs) and public corporations – borrowed, on net, £1.0 billion from banks and building societies (including overdrafts), following net borrowing of £6.2 billion in November. Within this measure, large non-financial businesses borrowed, on net, £0.7 billion of loans in December, compared to net borrowing of £6.0 billion in November. Over the same period, net borrowing by small and medium-sized non-financial businesses (SMEs) remained unchanged at £0.3 billion.
The annual growth rate of borrowing by large businesses was 7.7% in December, up from 7.2% in November. The annual growth rate of borrowing by SMEs also increased in December, to 2.2% from 2.0%, the highest since July 2021 (2.9%) (Chart 4).
Chart 4: Annual growth of lending to SMEs and large businesses
Seasonally adjusted
The effective interest rate on new loans from banks to UK PNFCs remained at 5.64% in December. The effective interest rate on new loans to SMEs fell back to 6.14% in December, and the lowest since January 2023 (5.92%).
Net Finance Raised (M&C Table F):
PNFCs repaid, on net, £1.4 billion from capital markets and banks and building societies in December, following net borrowing of £6.0 billion in November. This was driven by £2.5 billion of net bond redemptions, £2.2 billion of net equity buybacks, and £1.7 billion of net commercial paper redemptions. These were offset by £5.9 billion of net borrowing of loans from banks and building societies (Chart 5).
Chart 5: Net finance raised by PNFCs
Seasonally adjusted net flow
Businesses’ deposits:
In December, UK non-financial businesses deposited, on net, £12.9 billion with banks and building societies in all currencies, following net deposits of £1.6 billion in November. The effective rate on new time deposits from PNFCs decreased in December, to 3.39% from 3.47%. The effective rate on stock sight deposits was 2.03% in December, down from 2.05% in the previous month.
Aggregate money (M4ex) and lending (M4Lex) (M&C Tables J and K)
The net flow of sterling money (known as M4ex) was £13.2 billion in December, compared to £16.7 billion in November. December’s deposits were driven by households, non-intermediate other financial corporations (NIOFCs) and PNFCs increasing their holdings of money by £4.8 billion, £4.5 billion, and £3.8 billion respectively.
The flow of sterling net lending to private sector companies and households (M4Lex) was £12.6 billion in December, compared to £16.1 billion in the previous month. December’s lending was driven by households, PNFCs and NIOFCs borrowing £5.5 billion, £4.7 billion, and £2.3 billion respectively.
Queries
If you have any comments or queries about this release, please email DSD_MS@bankofengland.co.uk.
Next release date: 2 March 2026
