The BBA has published its High Street Banking Statistics for May 2016
Key points:
– Gross mortgage borrowing of £12bn in the month was 10% higher than in May 2015. Borrowing in the first five months of 2016 was £67.5bn compared with £51.7bn in the same period of 2015.
– House purchase approval numbers have bounced back a little from the low numbers seen in April (following the surge in the first few months of 2016) but are still some 2% lower than in May 2015.
– Consumer credit continues to show annual growth of about 6% reflecting uncertainty and in the case of personal loans and overdrafts favourable interest rates.
Dr Rebecca Harding, chief economic advisor at the BBA, said:
“The data for May shows a sustained increase in unsecured credit relative to earnings. Consumers are increasingly using short-term borrowing for spending, amid uncertainty around the economy and EU referendum.
“Mortgage approvals have bounced back following the sharp drop in April, caused by the initial reaction to the stamp duty surcharge. This increase suggests that claims of a slowdown in house price inflation may be premature.
“There has also been stronger growth in bank lending to manufacturing throughout the year. Businesses have shown stronger demand for finance in 2016 and will be keen that today’s referendum result does not slow activity down.”
