High Street Banking

Trends in deposits and finance for UK households (mortgages, cards, personal loans and overdrafts) and for businesses.

26th Jan 2017 Back to top
  • December 2016 figures for the high street banks

    Dr Rebecca Harding, BBA Chief Economist, said:

    “Overall, we’ve seen high levels of consumer and business borrowing, although there are early indications that 2017 could see softer demand for credit from business and households, as they anticipate future interest rate rises and wait for further clarity on Brexit.

    “Consumer credit continued to be strong in December despite weaker retail sales.

    “Re-mortgaging approvals were 30% higher than December 2015, reflecting borrowers’ desire to “lock in” lower interest rates ahead of potential rise later this year.

    “However, reduced demand for business borrowing may signal plans for investment are being deferred or funded through retained earnings until there is more certainty on the UK’s economic prospects after Brexit.”

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28th Dec 2016 Back to top
  • 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.”

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24th Nov 2016 Back to top
  • October 2016 figures for the high street banks

    Dr Rebecca Harding, BBA Chief Economist, said:

    “Consumer credit is now growing at its fastest rate since November 2006, reflecting strong retail sales growth. Consumer confidence remains robust as borrowers take advantage of record low interest rates.

    “Mortgage approvals ticked up a little October.  There has only been a relatively modest increase in activity since the Bank of England cut rates in August.

    “Finally, there was a slight increase in business borrowing in October but this was driven by a one-off factor and will probably unwind next month. However, businesses are increasingly going back to capital markets as a means to raise funding. They also continue to hold cash deposits, suggesting that they are building up cash reserves for ready access to resources should the need arise.”

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26th Oct 2016 Back to top
  • 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.”

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26th Sep 2016 Back to top
24th Aug 2016 Back to top
  • July 2016 figures for the high street banks

    Dr Rebecca Harding, BBA Chief Economist, said:

    “This month’s BBA High Street Banking statistics are the first set of borrowing figures gathered since the EU referendum. The data does not currently suggest borrowing patterns have been significantly affected by the Brexit vote, but it is still early days. Many borrowing decisions will also have been taken before the referendum vote.”

    “We are also clearly still a nation of shoppers and the Brexit vote has done nothing to change the fact that we use credit cards for short-term purchases. Strong retail sales figures appear closely associated with strong consumer credit growth.”

    “Businesses also appear to be borrowing as usual: the upward trend that characterised the first few months of this year is continuing. June’s data looks like a blip, probably caused by pre-Brexit nervousness. But it is too early to tell how the data over the next few months will reflect the result of the decision to leave the EU.”

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26th Jul 2016 Back to top
  • June 2016 figures for the high street banks

    Dr Rebecca Harding, BBA Chief Economist, said:

    “This month’s High Street Banking data reflects the uncertainty that was felt ahead of the EU referendum.

    “Business borrowing in June dropped for the first time in 2016, signalling that investment decisions were being delayed until after the vote.

    “Mortgage lending and approvals also fell back in June but remain above the low levels seen in April following the introduction of the stamp duty surcharge.”

    “Overall, business confidence was clearly fragile in anticipation of the outcome of the vote, but these results are not a verdict on the health of the economy post-Brexit. We won’t start to see that data come through until the autumn and any trends before then should not be over-interpreted”

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25th Jul 2016 Back to top
24th Jun 2016 Back to top
  • May 2016 figures for the high street banks

    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.”

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26th May 2016 Back to top
  • April 2016 figures for the high street banks

    Dr Rebecca Harding, BBA Chief Economic Advisor said: “As expected, growth in mortgage lending has fallen back sharply on last month proving that March’s results were just a Stamp-Duty spike. Net mortgage borrowing is nevertheless 3% higher than a year ago.

    “Separately, the fact that personal deposits are growing while ISA deposits continue to disappoint suggest consumers are using easy-access savings while the outlook for the economy remains uncertain. The increase in real wage growth may start to have positive  knock-on effects on long-term savings if it is sustained.”

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