The Bank of England said that consumer lending increased by 1.231 billion pounds in September after rising by 1.352 billion pounds in August (revised from 1.295 billion pounds). Economists had expected an increase by 1.30 billion pounds. Net borrowing through credit cards decreased from 0.5 billion pounds in August to 0.4 billion pounds in September, while net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) fell from 0.9 billion pounds to 0.8 billion pounds. The annual growth rate for all consumer credit was 7.5% compared to 7.7% in August.
Meanwhile, the net mortgage approvals rose from 64,960 in August to 66,650 in September, the highest level since August 2022. Economists had expected a decline to 64,900. Approvals for remortgaging (which only capture remortgaging with a different lender) rose by 3,100, to 30,800. The ‘effective’ interest rate on newly drawn mortgages was 4.76% in September, down from 4.84% in August. The rate on the outstanding stock of mortgages rose by 2 basis points, to 3.74%.
The report also showed that net borrowing by large non-financial businesses fell to 0.7 billion pounds in September, from 2.4 billion pounds in August, while net repayments by small and medium-sized non-financial businesses (SMEs) was unchanged at 0.6 billion pounds.