Businesses and consumers put their foot on the gas
Richard Woolhouse, chief economist at BBA, said: “British businesses and consumers have started to put their foot on the gas. There appears to be broad confidence about the economy, which the banks are supporting through affordable credit, leading to rises in borrowing across the board.
“Business lending has risen in three of the first four months this year indicating that we might have reached a turning point. There was a significant pre-election jump in mortgage approvals which we would expect to continue in the coming months.
“There was a sharp rise in the amount savers deposited in their bank accounts and also in the amount people are borrowing through personal loans and credit cards. This suggests that consumer spending will continue to drive the British economy forwards.”
Key points:
– Net borrowing by businesses has been positive in three of the last four months, with increased lending across several industry sectors.
– There was a significant rise in the number of mortgage approvals in April. House purchase approvals were higher than last month and 3% higher than in April 2014.
– Deposits with high street banks strengthened in April as the annual opportunity to invest in NISAs opened and attracted more funds than the same month a year ago.
– Unsecured borrowing is growing at its highest annual rate, of 4.9%, since autumn 2010, reflecting strong consumer confidence.
