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From 1 July 2017, the finance and banking industry operating in the UK will be represented by a new trade association, UK Finance. It will represent around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation will take on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.x
The BBA’s latest data from the high street banks* shows that consumer credit growth was 5.1% in May, compared with 6.4% in the previous month.
Gross mortgage borrowing totalled £13.3 billion in May. Net mortgage borrowing was 2.4% higher than a year ago.
Eric Leenders, BBA Managing Director for Retail Banking said:
“This month’s figures show that in the run up to the General Election, credit growth in personal loans, cards and overdrafts has slowed, which was reflected in lower spending; with increased household costs affecting growth in deposits and saving.
Businesses appear to be weighing up their options before raising finance to fund projects or developments. After a long period of subdued company borrowing, overall growth is starting to stabilise at a modest rate.”
Gross mortgage borrowing in May totalled £13.3bn much in line with recent months and 9% higher than a year before.
Net mortgage borrowing in May was 2.4% higher than a year ago.Consumer credit annual growth was 5.1% in May, compared with 6.4% in April. The decline in May was driven by weaker growth in personal loans and overdrafts with annual growth falling from 6.3% to 4.8%, while growth in credit card borrowing also slowed from 6.4% to 5.5% reflecting weaker retail sale volumes in May.
House purchase approval numbers in May of 40,347 were 3.3% lower than May 2016 and slightly down on the monthly average of 41,923 over the previous six months.
Remortgaging approval numbers of 24,248 were 10% lower than in May 2016 and down on the monthly average of 26,494 over the previous six months.
Other advances approved were 4.8% higher by number than in May last year.
Borrowing by non-financial companies
Borrowing by non-financial companies was largely flat in May. The annual growth rate of 2.8% in May was similar to that in April but slightly higher than the recent average.
Net capital market issuance in the first five months of 2017 was £5.1bn (net) compared to £12.7bn (net) in the same period of 2016.
The annual growth in personal deposits continued in May the downward path seen since September last year and at 2.6% is the lowest annual growth rate since December 2011.
ISA cash deposits with the high street banks fell by £0.7bn in May compared with a fall £0.6bn in May 2016 and the annual growth rate declined.
Non-financial companies’ deposits are currently growing at an annual rate of 6.1%.