Money and Credit - October 2025

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 fell back to £4.3 billion in October, after a rise to £5.2 billion in September.
• In October, net mortgage approvals for house purchase decreased by 600 to 65,000, while approvals for remortgaging fell by 3,600 to 33,100, the lowest since February 2025 (32,900).
• Net borrowing of consumer credit by individuals decreased for the second consecutive month, to £1.1 billion in October from £1.4 billion in September. Within this, net borrowing through credit cards slightly decreased, to £0.6 billion from £0.7 billion. Net borrowing through other forms of consumer credit was £0.5 billion in October, down from £0.7 billion in September.
• Private non-financial corporations (PNFCs) repaid, on net, £4.8 billion of finance in October, the highest level of net repayments since October 2023 (£5.5 billion).
• The net flow of sterling money (known as M4ex) was £8.5 billion in October, compared to £14.2 billion in September. This was largely driven by households increasing their holdings of money by £6.8 billion in October, with households depositing an additional £5.5 billion into interest-bearing sight deposit accounts, £4.2 billion into ISAs, and £0.3 billion into interest-bearing time deposit accounts.
• The flow of sterling net lending to private sector companies and households (M4Lex) was £13.0 billion in October, compared to £19.6 billion in September. October’s lending was driven by NIOFCs and households borrowing £8.2 billion and £4.7 billion respectively, while net borrowing by PNFCs was zero.

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 fell back to £4.3 billion in October, after a rise to £5.2 billion in September. Gross lending slightly decreased in October, to £24.5 billion from £24.8 billion. By contrast, gross repayments increased by £1.5 billion to £22.1 billion in October. The annual growth rate for net mortgage lending was unchanged when compared to September at 3.2% in October, the highest since January 2023 (3.4%).

Net mortgage approvals (that is, approvals net of cancellations) for house purchase, which is an indicator of future borrowing, decreased by 600 to 65,000 in October. Approvals for remortgaging (which only capture remortgaging with a different lender) fell by 3,600 to 33,100 in October (Chart 1), the lowest since February 2025 (32,900).

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages was 4.17% in October, down from 4.19% in September and the lowest since January 2023 (3.88%), continuing the downward trend observed since March 2025. The rate on the outstanding stock of mortgages remained unchanged for the third consecutive month at 3.89%.

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

Net borrowing of consumer credit by individuals decreased for the second consecutive month to £1.1 billion in October, from £1.4 billion in the previous month (Chart 2). In October, net borrowing through credit cards slightly decreased, to £0.6 billion from £0.7 billion. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) was £0.5 billion in October, down from £0.7 billion in September.

The annual growth rate for all consumer credit remained unchanged at 7.2% in October. Over the same period, the annual growth rate for credit card borrowing slightly increased, to 10.9% from 10.8%, while the annual growth rate for other forms of consumer credit decreased to 5.5% from 5.7%.

The effective interest rate on interest-charging overdrafts decreased by 8 basis points to 21.78% in October. The effective rate on new personal loans to individuals increased for the third consecutive month, to 8.39% in October from 8.34% in September. The effective rate on interest-charging credit cards also increased in October, to 21.54% from 21.44%.

Households’ deposits (M&C Table J):

In October, households deposited an additional £6.8 billion with banks and building societies, following net deposits of £8.2 billion in September. This was driven by households depositing an additional £5.5 billion into interest-bearing sight deposit accounts, £4.2 billion into ISAs, and £0.3 billion into interest-bearing time deposit accounts (Chart 3). These inflows were slightly offset by withdrawals of £1.8 billion from non-interest-bearing accounts.

The effective interest rate paid on individuals’ new time deposits with banks and building societies was 3.84% in October, up from 3.82% in September. The effective rate on the outstanding stock of time deposits continued the downward trend observed since September 2024, decreasing by 5 basis points to 3.37% in October. Similarly, the effective rate on the outstanding stock of sight deposits decreased to 1.77% from 1.81% over the same period.

Lending to and deposits from businesses

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

UK non-financial businesses – private non-financial companies (PNFCs) and public corporations – repaid, on net, £1.1 billion of loans from banks and building societies (including overdrafts) in October, following net repayments of £0.3 billion in September. Within this measure, large non-financial businesses repaid, on net, £1.1 billion of loans in October, compared to net repayments of £0.4 billion in the previous month. By contrast, small and medium-sized non-financial businesses (SMEs) borrowed, on net, £0.1 billion of loans, unchanged from September.

The annual growth rate of borrowing by large businesses decreased to 6.9% in October, from 8.2% in September. The annual growth rate of borrowing by SMEs was unchanged from September at 1.6% in October (Chart 4).

The effective interest rate on new loans from banks to UK PNFCs rose by 23 basis points, to 5.77% in October. The effective interest rate on new loans to SMEs also increased in October, to 6.26% from 6.18%.

Net Finance Raised (M&C Table F):

PNFCs repaid, on net, £4.8 billion to capital markets and banks and building societies in October, the highest level of net repayments since October 2023 (£5.5 billion). This was driven by £2.2 billion of net equity buybacks, £1.7 billion of net repayments of loans from banks and building societies, £1.2 billion of net bond redemptions, and £0.4 billion of net commercial paper redemptions (Chart 5).

Businesses’ deposits:

In October, UK non-financial businesses withdrew, on net, £5.5 billion from banks and building societies in all currencies, following net deposits of £8.7 billion in September. The effective rate on new time deposits from PNFCs was 3.46% in October, down from 3.49% in September. The effective rate on stock sight deposits slightly decreased, to 2.06% from 2.07% over the same period.

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

The net flow of sterling money (known as M4ex) was £8.5 billion in October, compared to £14.2 billion in the previous month. Within this, households and PNFCs increased their holdings of money by £6.8 billion and £3.0 billion respectively. By contrast, non-intermediate other financial corporations (NIOFCs) decreased their holdings of money by £1.4 billion.

The flow of sterling net lending to private sector companies and households (M4Lex) was £13.0 billion in October, compared to £19.6 billion in September. October’s lending was driven by NIOFCs and households borrowing £8.2 billion and £4.7 billion respectively, while net borrowing by PNFCs was zero.

Queries

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

Next release date: 5 January 2026