Mortgages and unsecured lending were closer to trend in February

* Total sterling lending to the UK private sector showed a net increase of £9.7bn (+1.0%) to £976.3bn. This was stronger than the previous month’s underlying rise of £6.7bn and slightly above the average recent monthly rise of £8.9bn.

* Mortgage lending rose by £5.4bn. This was not as strong as January’s peak of £5.8bn, though more in line with the recent average monthly rise. Within unsecured personal lending (+£0.7bn), card borrowing was more prominent than of late, rising by £0.3bn, though this was countered by weaker demand for personal loans.

* Overall lending to non-financial companies expanded (+£2.2bn), though this was around half as much as in the previous month. Real estate companies had the main increase (+£1.1bn), while wholesalers and manufacturers’ borrowing increased slightly.

* Lending to non-bank financial intermediaries rose by £1.0bn. This reflected increased lending to leasing companies, investment & unit trusts and miscellaneous intermediaries being partly offset by a net repayment from insurance companies & pension funds.

* Deposits from the private sector rose by £6.5bn (+1.0%) to £673.2bn. Of the rise, personal deposits accounted for £1.4bn, the smallest monthly rise for three months.

David Dooks, BBA director of statistics, said:

"February saw the growth in mortgage lending returning to trend after the particularly strong January figure. Overall growth in consumer credit in February was little different to the monthly rises over the previous twelve months or so and, although credit card borrowing was stronger than of late, this was offset to some extent by weaker demand for personal loans. Increased lending to industry was concentrated in only a few industries, notably real estate companies."

Analysis of MBBG sterling lending to UK public and private sectors

* Lending to individuals (after allowing for securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc – see Note 4 below)

Net lending rose by £6,143mn in February, compared to £6,654mn in January and +£5,552mn in February 2003). Mortgage lending accounted for £5,449mn of the rise, compared to January’s +£5,848mn. Growth in other personal credit was much weaker than the recent monthly average (loans and overdrafts rising by only £337mn), whilst card borrowing was stronger than of late, increasing by £349mn.

* Lending to financial firms

Increased lending to investment & unit trusts (+£564mn), leasing companies (+£253mn) and an underlying rise (after allowing for the acquisition of a mortgage book) of £715mn in lending to miscellaneous intermediaries was partly offset by net repayments from insurance companies & pension funds (-£403mn) and securities dealers (-£146mn).

* Lending to non-financial firms

Lending was not as strong as in the first month of the year. Real estate was the main sector seeing a rise (+£1,054mn), while the only other sectors to note seeing rises in lending were manufacturers (+£158mn) and wholesalers (+£139mn), whilst hotels & restaurants saw a fall in lending (-£138mn).