Latest figures from the Major British Banking Groups, for December 2004, show that:
- Total sterling lending to the UK private sector showed a net increase of £15.6bn (+1.5%) to £1,078.8bn. This was stronger than both November’s rise of £11.3bn and the average rise for the previous six months of £12.2bn.
- Net mortgage lending (inflated by some £0.5bn of internal group transactions) rose by £5.7bn. However, the underlying rise of around £5.2bn was stronger than recent months. Growth in overall unsecured personal lending (+£0.8bn) was down on November. While credit card borrowing (+£0.3bn) was slightly higher than in November, loans and overdrafts rose by only £0.4bn following £0.8bn in November.
- Lending to non-financial companies increased in December, though only in certain industrial categories. Borrowing by real estate companies (+£0.8bn) was well down on the average for the previous few months, whilst lending to hotels & restaurants increased by £0.6bn and lending to construction companies increased by £0.5bn.
- Overall lending to financial companies increased by an £4.1bn, with strong lending to financial intermediaries (+£2.7bn) and investment and unit trusts (+£1.3bn).
- Deposits from the private sector rose by £7.3bn (+1.0%) to £740.6bn. Of the total increase, personal deposits accounted for £2.9bn, well above the recent monthly average (+£2.0bn).
David Dooks, BBA director of statistics, said: "After four months of slower mortgage lending growth, December saw an underlying monthly rise similar to those seen in the first half of last year. It is likely, however, that this partly reflected a processing catch-up following the advent of mortgage regulation and the competitive attractiveness of specific products.
Consumer credit was weaker than in recent months. With card borrowing in line with the recent average and personal loan demand subdued, the picture in overall credit demand and increased deposits may suggest that consumers were careful in their spending during December".
Lending to individuals (after allowing for the effects of securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc — see note 4 below)
Net lending rose by £6,484mn in December, compared to £5,206mn in November and £5,941mn in December 2003. Mortgage lending (inflated by £0.5bn of internal group transactions) accounted for £5,741mn of the rise, compared to November’s rise of £4,195n. Within consumer credit, December saw an increase in loans and overdrafts of £416mn compared to November’s figure of +£788mn, while the rise in credit card borrowing (+£335mn) was broadly in line with the recent average (+£370mn).
Lending to financial companies increased by an underlying £4,112mn, with lending rising to other financial intermediaries (+£2,703mn) and to investment and unit trusts (£1,311mn).
Lending to real estate companies (+£761mn) was well down on the recent average, though it was still the main industry increasing its borrowing. Increases in lending to other industries were hotels and restaurants (+£561mn), construction companies (+£468mn), transport (£218mn) and wholesalers (+£210mn).
