This contrasts with weak card borrowing. Latest figures from the Major British Banking Groups, for August 2005, show that:
* Total sterling lending to the UK private sector showed a net underlying increase of £8.0bn (+0.7 per cent) to £1,119bn. This was down on the previous month’s rise of £11.6bn and the average of +£10.0bn over the previous six months.
* Net mortgage lending in August rose by an underlying £4.3bn. Though this was higher than July’s weak rise of +£3.7bn, it was in line with the average of +£4.4bn over the previous six months. Growth in overall unsecured personal lending (+£0.7bn) was higher than both July and the average of the previous six months. Of this, loans & overdrafts rose by £0.8bn (compared with the recent average of +£0.4bn), whilst credit card borrowing decreased by £0.1bn.
* Lending to real estate companies was the largest component of lending to non-financial companies, rising by an £1.7bn. Partly offsetting this rise were net repayments from hotels & restaurants and transport, storage & communications.
* Deposits from the private sector rose by £4.2bn (+0.5 per cent) to £792bn. Of the total increase, personal deposits accounted for £1.5bn, the weakest increase this year.
David Dooks, BBA director of statistics, said: "After fluctuations in June and July, August saw mortgage lending return to the very stable trend that we have seen throughout this year. There was a stronger increase in overall consumer credit in August as a result of higher demand for loans and overdrafts, but in marked contrast, credit card lending fell for the second time this year. This weakness on cards ties in with the very weak retail sales data and reflects consumer caution in relation to their borrowing."
