Key data highlights:

  • Gross mortgage lending in February is estimated to have been £19bn, 4.9 per cent more than a year earlier but below the monthly average of £21.4bn for 2017. Remortgage approvals in the month are up over 9 per cent in both number and value compared to February 2017.
  • Consumer spending was mainly reflected in the use of credit cards, with outstanding levels of card borrowing growing at a rate of 6.3 per cent over the year, while use of loans and overdrafts continues to fall.
  • UK businesses’ deposits grew by almost 7 per cent in the past 12 months, while borrowing over the same period grew slightly by 0.5 per cent.  Within business sectors, manufacturers’ borrowing expanded, while construction and property-related sectors contracted.

Commenting on the data, Eric Leenders, Managing Director, Personal Finance at UK Finance said:            

“There has been an increase in remortgage approvals compared to last year, as borrowers look to lock in to attractive deals amid speculation of further interest rate rises later this year.

“We are also seeing a continuing rise in credit card spending, reflecting the growing number of transactions carried out using cards, while other forms of borrowing such as overdrafts continue to fall.

“Meanwhile real wages continue to be squeezed by inflation, impacting on consumer confidence and retail sales. This pressure on household incomes should ease in the coming months, as the effect of the fall in sterling begins to fade and the strong labour market leads to a better outlook for wage growth.”

Stephen Pegge, Managing Director, Commercial Finance at UK Finance added:

“Bank lending to businesses saw modest year-on-year growth in February, driven by investment within the manufacturing sector.

“Credit balances have risen at an even faster rate as companies build reserves in the face of economic uncertainty and its effect on longer term business confidence.”

Notes to Editor

  1. For more information please call the UK Finance Press Office on 020 7416 6750 or e-mail press@ukfinance.org.uk.
  2. UK Finance is the trade association formed on 1 July 2017 to represent the finance and banking industry operating in the UK. It represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The organisation brings together most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.
  3. High street banks’ data reflect around two-thirds of all UK retail banking, while full market data, which includes banks, building societies and other specialist mortgage lenders, are either estimated by UK Finance or published by the Bank of England.
Attachments
Update on Lending for February 2018