Unsecured borrowing dips

Figures for the Major British Banking Groups (Banks) have shown that Net mortgage lending has risen by an underlying £6.1bn – an amount which is higher than both the £5.8bn recorded in the previous month and the £5.4bn recent monthly average.

In addition to this, underlying credit card borrowing fell by £0.1bn, while loans and overdrafts also fell by £0.3bn.

Total sterling lending to the UK private sector also rose by an underlying £24.5bn net (+1.8%) to £1,370bn. This was much stronger than the underlying rise of £14.8bn in July and average of +£13.3bn over the previous six months.

Lending to real estate companies rose by £1.4bn while lending increased to construction by £0.9bn (partly on account of takeover finance) and to food, beverages & tobacco by £0.2bn.

Deposits from the private sector rose by £12.1bn (+1.2%) to £1,012bn. Personal deposits increased by £4.4bn, higher than the recent average monthly growth of £3.2bn.

David Dooks, BBA director of statistics, said: “August figures gave no indication of the financial market difficulties seen last week. Banks’ mortgage lending - standing at £550 billion - rose by more than the recent trend, in part reflecting higher remortgaging activity.

“In contrast, unsecured borrowing fell and there was a further reduction in credit card debt, while customers' deposits of £520 billion continued to grow in line with the recent pattern.”