28th December 2016

November 2016 figures for the high street banks

Dr Rebecca Harding, BBA Chief Economist, said:

“Consumer credit growth continues to be strong, despite falling back a little in November, reflecting strong retail sales in recent months.

“The reduction in interest rates in August may have boosted remortgaging approvals, with consumers looking to take advantage of the current economic conditions and lock-in lower interest rates.

“A corollary of a low interest rate environment is a growth in deposits and we’ve seen personal deposits, in particular, grow more strongly in recent months as consumers hoard cash in the absence of higher-yielding, liquid investment opportunities. This growth in personal deposits may also suggest that consumers are looking to grow their cash reserves against potential economic uncertainties, such as an expectation of lower wage growth.”


Annual borrowing growth rates

Household borrowing

Gross mortgage borrowing of £12.2bn in the month was 5% lower than in November 2015.

Net mortgage borrowing is 2.4% higher than a year ago.

Consumer credit annual growth fell back in November to around 6% despite strong retail sales. Growth continues to be supported in the case of personal loans by favourable interest rates.


Number of approvals

Mortgage approvals

House purchase approval numbers are 9% lower than in November 2015 and in the first eleven months of 2016 were 4% lower than in the same period of 2015.

Remortgaging approvals were 14% higher than those in November 2015 and in the first eleven months of 2016 were 13% higher than in the equivalent period of 2015.

Other advances were 10% higher than a year ago.


Business borrowing annual growth rates

Borrowing by non-financial companies

Borrowing by non-financial companies decreased by £1.2bn in November, as the short-term borrowing taken last month unwound.

Lower demand for finance may reflect companies reducing investment plans and preferring to use internal funds rather than borrowing.

Net capital market issues in the eleven months to November 2016 were £17.3bn (net), compared with bank borrowing of £13.8bn (net) over the same period.


Trends in net deposits

Deposits

Personal deposits have been growing more strongly in recent months and annual growth was 4.8% in November. In the first eleven months of 2016 personal deposits have grown by £32.4bn compared with £19.8bn in the same period of 2015.

Non-financial companies deposits grew at an average annual rate of over 8% in 2015 but fell back in the first half of 2016 and are currently growing at an annual rate of 4.0%. In the first eleven months of 2016 non-financial companies deposits have grown by £8.5bn compared with £25.6bn in the same period of 2015.