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:

Individuals borrowed, on net, £1.5 bn of mortgage debt in February, compared to £1.1 bn of net repayments in January.

Net mortgage approvals for house purchases rose from 56,100 in January, to 60,400 in February. Net approvals for remortgaging also increased, from 30,900 to 37,700 during this period.

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 29 basis points, to 4.90% in February.

Net consumer credit borrowing decreased to £1.4 bn in February, from £1.8 bn in January.

UK non-financial businesses (PNFCs and public corporations) repaid, on net, £3.3 bn of loans to banks and building societies in February, compared with £0.2 bn of net repayments in January.

The net flow of sterling money (known as M4ex) continued to be volatile month-on-month. M4ex rose by £7.2 bn in February, compared to a flow of -£0.2 bn in January. This was mainly driven by households’ holdings of money, which rose by £6.0 bn in February, down from a £6.6 bn increase in January.

The flow of sterling net lending to private sector companies and households (M4Lex) amounted to -£15.8 bn in February, down from -£3.2 bn in January. This was mainly driven by a further decrease in the flow of lending to non-intermediate other financial corporations (NIOFCs).

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 individuals

Mortgage lending (M&C Tables D and E):

Individuals borrowed, on net, £1.5 bn of mortgage debt in February, compared to £1.1 bn of net repayments in January, and was the highest borrowing since January 2023 (£1.9 bn). The annual growth rate for net mortgage lending continued to be slightly negative at -0.1%, compared to -0.2% in January. Gross lending rose from £17.1 bn in January to £18.0 bn in February, while gross repayments decreased from £18.5 bn to £16.7 bn over the same period.

Net approvals (that is, approvals net of cancellations) for house purchases, which is an indicator of future borrowing, rose from 56,100 in January to 60,400 in February – the highest since September 2022 (65,300). Net approvals for remortgaging (which only capture remortgaging with a different lender) also increased, from 30,900 to 37,700 during this period (Chart 1).

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 29 basis points, to 4.90% in February. The rate on the outstanding stock of mortgages increased by 7 basis points, from 3.41% in January to 3.48% in February.

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

Net consumer credit borrowing decreased to £1.4 bn in February, from £1.8 bn in January (Chart 2).

This decrease was mainly driven by lower net borrowing through credit cards, which fell from £0.8 bn to £0.5 bn. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) also decreased slightly, from £1.0 bn in January to £0.9 bn in February.

The annual growth rate for all consumer credit dropped from 9.0% to 8.7%. The annual growth rate for credit cards and other forms of consumer credit both decreased, to 11.9% and 7.3% in February, respectively.

The effective interest rate on interest-charging overdrafts decreased by 13 basis points, to 22.79% in February. The effective rate on new personal loans to individuals dropped by 26 basis points to 8.76%. By contrast, the effective rate on interest-bearing credit cards increased by 26 basis points during this period, to 21.55%.

Households’ deposits (M&C Table J):

In February, household deposits with banks and building societies rose by £6.0 bn, which marked the fifth consecutive monthly increase. This was mainly driven by flows into interest-bearing sight deposits of £3.5 bn in February. Flows into non-interest bearing accounts increased from -£3.5 bn in January to £0.2 bn in February, while flows into time deposits remained weak at £0.1 bn (Chart 3).

The effective interest rate paid on individuals’ new time deposits with banks and building societies fell by 7 basis points, to 4.46%. The effective rate on the outstanding stock of time deposits increased by 5 basis points to 3.81% in February, and the effective rate on stock sight deposits also rose, by 4 basis points, to 2.11%.

Lending to and deposits from businesses

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

In February, UK non-financial businesses (PNFCs and public corporations) repaid, on net, £3.3 bn of loans from banks and building societies (including overdrafts), compared with £0.2 bn of net repayments in January. Within this measure, large non-financial businesses repaid £2.3 bn in February compared to net zero of borrowing in January. Similarly, small and medium-sized non-financial businesses (SMEs) made net repayments of £1.0 bn in February, compared to net repayments of £0.2 bn in January.

The annual growth rate of borrowing by large businesses was 1.4% in February, up from 1.2% in January. The growth rate of lending to SMEs decreased slightly further, from -4.8% in January to -4.9% in February (Chart 4).

The average cost of new borrowing from banks by UK PNFCs fell by 4 basis points, from 7.01% in January to 6.97% in February. By contrast, the effective interest rate on new loans to SMEs increased by 5 basis points, to 7.55% in February.

Net Finance Raised (M&C Table F):

In February, private non-financial corporations (PNFCs) repaid, on net, £5.1 bn of finance, an increase from net repayments of £3.8 bn in January. Within this, PNFCs repaid, on net, £3.0 bn of bank loans, and bought back £2.4 bn of equity, continuing the observed trend since October 2021 (Chart 5).

Businesses’ deposits:

During February, UK non-financial businesses deposited £1.8 bn with banks and building societies in all currencies, following withdrawals of £19.9 bn in January. The effective rate on new time deposits from PNFCs saw a 1 basis point increase, to 4.66% in February. The effective rate on stock sight deposits also rose, by 2 basis points, and now sits at 2.71%.

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

The net flow of sterling money (known as M4ex) continued to be volatile month-on-month. M4ex rose by £7.2 bn in February, compared to a flow of -£0.2 bn in January. This was mainly driven by households’ holdings of money, which rose by £6.0 bn in February, down from a £6.6 bn increase in January. PNFCs and non-intermediate other financial corporations (NIOFCs) also increased holdings of money, by £1.1 bn and £0.2 bn in February, respectively.

The flow of sterling net lending to private sector companies and households (M4Lex) dropped significantly from -£3.2 bn in January to -£15.8 bn in February. This was almost wholly driven by a further decrease in the flow of net lending to NIOFCs, from -£3.8 bn in January to -£15.7 bn in February. The flows of net lending to PNFCs also contributed to this overall decrease, falling from £1.1 bn in January, to -£1.5 bn in February. This was slightly offset by the flow of lending to households increasing from -£0.5 bn to £1.5 bn over the same period.