Total lending increased in February by £10 billion to £808 billion, up 1.3 per cent on January's rise of £7.3 billion and much higher than the recent monthly average of £6.8 billion.
Lending to individuals accounted for £5.1 billion of the increase, up slightly on the £5 billion in January, although higher consumer credit has offset the noticeably less strong increase in mortgage lending. Mortgage lending rose by £3.9 billion, compared with the peak monthly rise of £4 billion in January. However, this was diffused by lending to the financial sector which was significantly higher than in January, up £2.8 billion.
Ian Mullen, chief executive of the BBA, said: "Much of the increase in lending to the financial sector, and securities dealers in particular, arose from higher market activity and was short-term in nature. It is likely to have already been repaid. Overall lending to individuals rose by a similar amount as in January. A slightly weaker rise in mortgage lending was offset by stronger consumer credit, a rise in credit card borrowing reflecting the growing sophistication of consumers taking advantage of offers to move balances to cards charging lower interest rates. The continued growth of commercial and residential property prices, particularly in the South East, could well lie behind the continued strength of lending to property companies."
