The Bank of England said that consumer lending increased by 1.358 billion pounds in February after rising by 1.701 billion pounds in January (revised from 1.74 billion pounds). Economists had expected an increase by 1.50 billion pounds. Net borrowing through credit cards decreased to 0.8 billion pounds in February, from 1.1 billion pounds in January, while net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) remained at 0.6 billion pounds in February. The annual growth rate for all consumer credit remained stable at 6.4% in February.
Meanwhile, the net mortgage approvals fell to 65,480 from 66,040 in January (revised from 66,190). Economists had expected a decline to 66,000. Approvals for remortgaging (which only capture remortgaging with a different lender) decreased by 800 to 32,000 in February, following an increase of 2,100 in January. The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased by 2 basis points, to 4.53% in February. The rate on the outstanding stock of mortgages was 3.87% in February, up from 3.81% in January.
The report also showed that large non-financial businesses repaid, on net, 0.2 billion pounds, compared to 2.0 billion pounds of net borrowing in January. Small and medium-sized non-financial businesses (SMEs) repaid, on net, 0.3 billion pounds, compared to 0.5 billion pounds of net borrowing in January.