Key data highlights:
• Gross mortgage lending in February is estimated to have been £19bn, 4.9% more than a year earlier but below the monthly average of £21.4bn for 2017. Remortgage approvals in the month are up over 9% in both number and value compared to February 2017.
• Consumer spending was mainly reflected in the use of credit cards, with outstanding levels of card borrowing growing at a rate of 6.3% over the year, while use of loans and overdrafts continues to fall.
• UK businesses' deposits grew by almost 7% in the past 12 months, while borrowing over the same period grew slightly by 0.5%. Within business sectors, manufacturers' borrowing expanded, while construction and property-related sectors contracted.
Commenting on the data, Eric Leenders, managing director, personal finance at UK Finance said:
“There has been an increase in remortgage approvals compared to last year, as borrowers look to lock in to attractive deals amid speculation of further interest rate rises later this year.
“We are also seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing such as overdrafts continue to fall.
“Meanwhile real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales. This pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.”
Stephen Pegge, managing director, commercial finance at UK Finance added:
"Bank lending to businesses saw modest year-on-year growth in February, driven by investment within the manufacturing sector.
"Credit balances have risen at an even faster rate as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence."