UK Finance update on lending - March 2018


Latest update on household finance by UK Finance 

• Card spending was 1.2% lower than in March 2017 with repayments outstripping new lending in the first quarter of 2018. Outstanding levels of credit card borrowing have grown by 5.8% over the year.

• Gross mortgage lending in March is estimated to have been £20.5bn, 2.3% lower than a year earlier. The number of total mortgage approvals has also fallen and is 15% lower, with house purchase approvals falling by almost 21%, compared to a year earlier.

• Growth in personal deposits has grown by 1.8% over the year, slightly down on the previous six-month average of 2%. 

Eric Leenders, managing director, personal finance, UK Finance, comments:

“March figures show that consumer borrowing was fairly modest, with card spending down and repayments outstripping lending in the first quarter of 2018.  Growth in personal deposits also increased over the year, alongside a rise in overdraft repayments. 

“There was a rising trend in mortgage approvals for the first three months of 2018 although the number is slightly lower than the same period in 2017.” 

Latest update on business finance by UK Finance

• UK business borrowing grew slightly at 0.2% in the last 12 months. Within industry sectors manufacturing continued to show strong growth at 8.8% while construction contracted by 6.7% in the year.

• UK business deposits grew by 3.4% in the last 12 months, down on the previous six month average of 6.4%. 

Stephen Pegge, managing director of commercial finance, UK Finance, commented:

“Bank lending to the manufacturing sector saw a 9% boost in the year to March, helping businesses to grow and invest. 

“This reflects improved optimism amongst manufacturing firms, who are taking advantage of the competitiveness of sterling and strengthening global economy to expand overseas. 

“Overall lending to businesses of all sizes is marginally up year on year. However, borrowing in the construction sector has contracted, affected by the unusually severe weather. 

“This mixed economic outlook is expected to continue in the coming months, as rising wages and output growth are counter-balanced by uncertainty over Brexit impacting on longer-term investment decisions.”