26th October 2016

September 2016 figures for the high street banks

Dr Rebecca Harding, BBA Chief Economist, said:

“Consumer credit is growing at its fastest rate since December 2006, driven by strong demand for personal loans and credit cards. Consumers are increasingly using short-term borrowing to take advantage of record low interest rates. This trend has accelerated since the Bank of England cut rates in August.

“Mortgage approvals picked up slightly this month but the housing market continues to shows signs of underlying weakness. Both house purchase and remortgaging approvals are down on the corresponding figures for 2015.

“Business borrowing decreased slightly again in September, which may be in part down to uncertainty following the EU referendum. There is a longer time lag behind corporate investment decisions so it may take longer for the effect of the interest rate cut to filter through to such borrowing.”


 

Annual borrowing growth rates

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Household borrowing

  • Gross mortgage borrowing of £12bn in the month was 2% lower than in September 2015.
  • Net mortgage borrowing is 2.6% higher than a year ago.
  • Consumer credit continues to show annual growth of over 6% despite only moderate retail sales growth supported in the case of personal loans and overdrafts by favourable interest rates.

Number of approvals

Mortgage approvals

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  • House purchase approval numbers are 15% lower than in September 2015 and in the first nine months of 2016 they are 3% lower than in the same period of 2015.
  • Remortgaging approvals were similar to those in September 2015 but in the first nine months of 2016 were 15% higher than in the equivalent period of 2015.
  • Other advances were 8% higher than a year ago.

Business borrowing annual growth rates

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Borrowing by non-financial companies

 

  • Borrowing by non-financial companies decreased by £0.3bn in September following a small decline in August.
  • Net capital market issues by non-financial companies increased by £3.9bn in September however in the nine months to September 2016, a total of £13.9bn (net) has been raised. This alternative finance compares with an increase in bank borrowing of £6.5bn (net) over the same period.

Trends in net deposits

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Deposits

  • Personal deposits have been growing more strongly in recent months and annual growth was 5.0% in September. In the first nine months of 2016 personal deposits have grown by £31bn compared with £17bn 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 4.6%. In the first nine months of 2016 non-financial companies deposits have grown by £6bn compared with £17bn in the same period of 2015.