Increase in net borrowing of mortgage debt

This figure increased from £5.1bn to £6.1bn and remains above its 12-month pre-pandemic average up to February 2020 of £4.3bn. Both gross lending and repayments didn’t change much at £25.4bn and £20.4bn respectively. 

Additionally, house purchase approvals, used as an indicator of future borrowing, increased by more than 10,000 between July and August - going up from 63,700 to 74,300. This is also above the 12-month pre-pandemic average of 66,800. 

Looking at consumer credit, individuals borrowed £1.1bn in August - which remains above the 12-month pre-pandemic average of £1bn. This was split between the £700m made on credit cards and the £400m through other forms of consumer credit. 

Additionally, the annual growth rate for all consumer credit remained at seven percent - the highest rate since March 2019, with the annual growth rate of credit card borrowing also remaining unchanged at 12.9% - the highest since October 2005. The annual growth rate of other forms of consumer credit, meanwhile, saw little change at 4.5%. 

As for the rates on new personal loans to individuals, these decreased by five basis points to 6.84% in August - but remained close to the February 2020 level of 6.90%. The effective rate on interest-bearing credit cards however increased to 18.66% in August - with this still sitting above the February 2020 level of 18.55%. 

Households, meanwhile, deposited an additional £3.2bn with banks and building societies in August. Within this, flow into time deposits remained positive, but weakened significantly in the month to £800m from the £2.9bn figure seen in July. 

In contrast, flows into interest-bearing sight deposits increased slightly from £500m in July to £800m in August. 

Looking at company borrowing rates, UK non-financial businesses borrowed £7.7bn of bank and building society loans in August, on net, compared to £2bn of repayments in July. This is the highest flow of borrowing since April 2020. 

Within this, large non-financial businesses borrowed - on net - £7.7bn, compared to £1.7bn in repayments in July. In addition, net repayments by small and medium-sized non-financial enterprises (SMEs) went to net zero in August, reducing from the £300m made in net repayments in July. 

Alongside this, the annual growth rate of borrowing by large businesses increased by 2.8% to 8.2%, while for SMEs it rose by 0.3% to -4.3%.