Bank of England Monthly Statistics: May Overview

The Bank of England’s monthly statistics for May provide detailed insights into the trends and developments in borrowing and deposits by households and businesses. These statistics are crucial for understanding the broader economic conditions in the UK.

Key Highlights

  1. Mortgage Lending and Approvals
    • Net Mortgage Repayments: Individuals repaid a net £0.1 billion of mortgage debt in May, a significant decrease from the record £1.5 billion net repayments in April.
    • Gross Lending and Repayments: Gross lending rose from £16.4 billion in April to £18.7 billion in May, while gross repayments slightly increased from £18.6 billion to £18.9 billion.
    • Mortgage Approvals: Net approvals for house purchases rose to 50,500 from 49,000 in April. Approvals for remortgaging increased to 33,600 from 32,500.
    • Interest Rates: The effective interest rate on newly drawn mortgages increased by 10 basis points to 4.56%. The rate on outstanding mortgages rose from 2.75% to 2.82%.
  2. Consumer Credit
    • Net Borrowing: Net borrowing on consumer credit decreased from £1.5 billion in April to £1.1 billion in May. This included £0.6 billion on credit cards and £0.5 billion through other forms of consumer credit.
    • Annual Growth Rates: The annual growth rate for all consumer credit slightly decreased to 7.5% from 7.6%, and for credit card borrowing, it fell to 12.4% from 12.7%.
    • Interest Rates: The effective interest rate on interest-charging overdrafts fell from 21.86% to 21.78%. Rates on new personal loans slightly decreased to 8.27%, while interest-bearing credit cards saw a record high rate of 20.44%.
  3. Household Deposits
    • Withdrawals: Households withdrew a net £4.6 billion from banks and building societies, marking the highest level of withdrawals on record since October 1997. Withdrawals from interest-bearing sight deposits surged to £11.4 billion.
    • Deposits: Despite significant withdrawals, time deposits saw net inflows of £4.9 billion, and ISAs had a net inflow of £3.3 billion.
    • Interest Rates: The effective interest rate on new time deposits rose to 3.95%, while the rate on outstanding time deposits increased to 2.56%. The rate on stock sight deposits dropped to 1.33%.
  4. Business Borrowing and Deposits
    • Bank Loans: UK non-financial businesses repaid a net £0.6 billion in bank and building society loans. Net borrowing by large non-financial businesses decreased to £0.4 billion, while SMEs repaid £1.0 billion.
    • Interest Rates: The effective interest rate on new borrowing for large businesses rose to 6.32%, and for SMEs, it increased to 6.86%.
    • Market Finance: Private non-financial companies (PNFCs) made net repayments of £1.6 billion in market finance, including £2.4 billion in equity buybacks.
    • Deposits: UK non-financial businesses deposited £9.8 billion with banks and building societies, the first net deposits since August 2022. The effective rate on new time deposits increased to 3.94%.
  5. Aggregate Money and Lending
    • Sterling Money (M4ex): The net flow of sterling money decreased to -£4.6 billion, driven primarily by household withdrawals.
    • Sterling Net Lending (M4Lex): The flow of sterling net lending to private sector companies and households rose from -£1.0 billion in April to £0.9 billion in May.

Summary

The data from May indicates a mix of trends:

  • Households: While there was a significant net repayment of mortgage debt, gross lending increased. Consumer credit borrowing decreased, and households made substantial withdrawals from banks, especially from interest-bearing sight deposits.
  • Businesses: Both large businesses and SMEs experienced rising borrowing costs, with net repayments in loans and significant market finance repayments. However, businesses made substantial net deposits, indicating some financial resilience.
  • Interest Rates: Interest rates for both households and businesses are on the rise, reflecting tighter monetary conditions.

These statistics highlight the ongoing adjustments in the UK economy, with rising interest rates impacting borrowing and deposit behaviors of households and businesses

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