Money and Credit - August 2026

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 increased to £4.4 billion in August, from £4.1 billion in July, below the previous 6-month average of £5.2 billion.
• Net mortgage approvals for house purchases decreased to 54,900 in August, below an average of around 60,100 over the previous 6 months. Approvals for remortgaging decreased to 34,000 in August, from 34,600 in July.
• Net borrowing of consumer credit by individuals increased to £2.5 billion in August, from £2.1 billion in July, above the previous 6-month average of £1.9 billion. Within this, net borrowing through credit cards was £1.2 billion in August, up from £0.9 billion in July. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to £1.3 billion in August, from £1.2 billion in July.
• Private non-financial corporations (PNFCs) borrowed, on net, £7.7 billion of finance in August, following close to no net finance raised in July. Within total net finance raised, bank loans amounted to £5.7 billion of borrowing in August, following £0.9 billion of net repayments in July.
• The net flow of sterling money (known as M4ex) increased to £16.2 billion in August, from -£9.8 billion in July. This was driven by NIOFCs, Households and PNFCs increasing their holdings of money by £11.1 billion, £4.7 billion and £0.4 respectively. Households deposited £4.4 billion into ISAs, £0.3 billion into non-interest-bearing deposit accounts and £0.3 billion into interest-bearing time deposits. These increases were partially offset by withdrawals of £1.6 billion from interest-bearing sight deposit accounts.
• The flow of sterling net lending to private sector companies and households (M4Lex) increased to £3.9 billion in August, following -£0.1 billion in July. August’s lending was mainly driven by Households and PNFCs borrowing £5.6 billion and £2.7 billion respectively, compared with £5.0 billion and £1.9 billion in July. These increases were offset by NIOFCs repaying £4.4 billion.

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 increased to £4.4 billion in August, from £4.1 billion in July, below the previous 6-month average of £5.2 billion. The annual growth rate for net mortgage lending remained unchanged at 3.6% in August.

Secured gross lending decreased to £23.6 billion in August, down from £25.3 billion in July, and below the 6-month average of £26.5 billion. Repayments decreased slightly in August to £20.4 billion, from £21.1 billion, below the 6-month average of £21.0 billion.

Note: The difference between gross lending minus repayments and net lending figures is due to varying seasonal adjustment methods applied across these series (see Chart 1).

Net mortgage approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, decreased to 54,900 in August, from 55,900 in July. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased to 34,000 in August, from 34,600 in July.

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased to 4.60% in August, from 4.45% in July. The rate on the outstanding stock of mortgages was 4.00% in August, up from 3.97% in July.

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

In August, net borrowing of consumer credit by individuals increased to £2.5 billion from £2.1 billion in July (Chart 3), above the previous 6-month average of £1.9 billion. Within this, net borrowing through credit cards was £1.2 billion in August, up from £0.9 billion in July. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to £1.3 billion, from £1.2 billion over the same period.

The annual growth rate for all consumer credit increased slightly to 9.6% in August, from 9.3% in July. Over the same period, the annual growth rate for credit card borrowing increased to 13.3% from 12.6% in July, and the annual growth rate for other forms of consumer credit increased slightly to 7.9%, from 7.7% in July (Chart 4).

The effective interest rate on interest-charging overdrafts decreased by 33 basis points, to 20.27% in August. The effective rate on new personal loans to individuals increased to 9.96% in August from 9.86% in July. The effective rate on interest-charging credit cards increased in August, to 21.55% from 21.45%.

Households’ deposits (M&C Table J):

Households’ deposits with banks and building societies increased by £4.7 billion in August, following net deposits of £3.8 billion in July. This was driven by households depositing an additional £4.4 billion into ISAs, £0.3 billion into non-interest bearing accounts and £0.3 billion into interest-bearing time accounts. These inflows were partially offset by withdrawals of £1.6 billion from interest-bearing sight deposit accounts (Chart 5).

The effective interest rate paid on individuals’ new time deposits with banks and building societies increased to 4.24% in August, from 4.21% in July. The effective rates on the outstanding stock of time and sight deposits were 3.41% and 1.65% respectively, compared to 3.39% and 1.65% in July.

Lending to and deposits from businesses

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

In August, UK non-financial businesses (PNFCs and public corporations) borrowed, on net, £4.1 billion of loans from banks and building societies (including overdrafts), following £1.9 billion of net borrowing in July. Within this measure, large non-financial businesses borrowed £3.2 billion, following net borrowing of £1.0 billion in July. Small and medium-sized non-financial businesses (SMEs) borrowed, on net, £0.9 billion in August, remaining unchanged from July.

The annual growth rate of borrowing by large businesses decreased to 8.9% in August, from 9.4% in July. The annual growth rate of borrowing by SMEs increased to 4.6% from 4.1% over the same period (Chart 6).

The effective interest rate on new loans from banks to UK PNFCs decreased by 5 basis points to 5.57% in August. The effective interest rate on new loans to SMEs increased to 6.63% from 6.61% over the same period.

Net Finance Raised (M&C Table F):

PNFCs borrowed, on net, £7.7 billion of finance in August, following close to no net finance being raised in July. Borrowing in August was driven by £5.7 billion of net borrowing through loans from banks and building societies, and £0.5 billion of net bond issuance. These were partially offset by £1.6 billion of net equity buybacks and £0.2 billion of net commercial paper redemptions (Chart 7).

Businesses’ deposits:

In August, UK non-financial businesses deposited £6.6 billion with banks and building societies in all currencies, following net withdrawals of £9.2 billion in July. The effective rate on new time deposits from PNFCs increased to 3.47% in August from 3.46% in July, with the effective rate on stock sight deposits remaining unchanged at 1.97%.

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

The net flow of sterling money (known as M4ex) increased to £16.2 billion in August, from -£9.8 billion in July (Chart 8). Within this, non-intermediate other financial corporations (NIOFCs), households and PNFCs increased their holdings of money by £11.1 billion, £4.7 billion and £0.4 billion respectively.

The annual growth rate of M4ex increased slightly to 4.4% in August, from 4.3% in July.

The flow of sterling net lending to private sector companies and households (M4Lex) increased to £3.9 billion in August, following a decrease of £0.1 billion in July (Chart 9). August’s lending was mainly driven by Households and PNFCs borrowing £5.6 billion and £2.7 billion respectively, compared with £5.0 billion and £1.9 billion in July. These increases were offset by NIOFCs repaying £4.4 billion.

The annual growth rate of M4Lex decreased slightly to 6.1% in August, from 6.4% in July.

Queries

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

Next release date: 29 October 2026