* Total net sterling lending to the UK private sector increased by £10.6bn (+1.1%) to £961.9bn. This was not as strong as the previous month's underlying rise of £15.1bn, though it was above the recent monthly trend.
* Mortgage lending rose by £5.4bn. After November's smaller underlying rise of £4.8bn, December's increase was back in line with the recent trend. Unsecured personal lending rose by £0.7bn, though within this, card borrowing was again modest, rising by just £0.2bn.
* Lending to non-financial companies fell by £0.6bn. Though lending to real estate companies continued to rise strongly (+£0.8bn), lending to other companies contracted, with net repayments coming from construction companies, hotels & restaurants, wholesalers, retailers, whilst overall lending to the manufacturing sector fell for the 8th consecutive month.
* Lending to non-bank financial companies again made a significant contribution to the overall rise in lending. Securities dealers' funding requirements rose substantially, by £3.5bn and lending to miscellaneous intermediaries rose by £1.5bn
* Deposits from the private sector rose by £3.4bn (+0.5%) to £669.7bn. Of the rise, personal deposits accounted for a strong £2.7bn at the year-end, after allowing for seasonal factors.
David Dooks, BBA director of statistics, said:
"December's rise in total lending reflected demand from the financial sector and individuals. Mortgage lending growth was back on trend, after a dip in November, though consumer credit and in particular, card borrowing appear to have mirrored the reports of weak Christmas spending. The non-financial sector, apart from real estate companies, paid back some of its borrowing for the year-end, so it was only substantial borrowing by other financial intermediaries that prevented a more modest total lending picture."
Analysis of MBBG sterling lending to UK public and private sectors
* Lending to individuals (after allowing for securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc - see Note 4 below)
Net lending rose by £6,069mn in December, compared to £5,588mn in November and was virtually the same as in December last year (+£6,003mn). Mortgage lending accounted for £5,412mn of the rise, compared to November's underlying +£4,775mn. Growth in other personal credit was weaker than the recent monthly average (loans and overdrafts rising by £510mn) and card borrowing increased by only £158mn.
* Lending to financial firms
The short-term requirements of securities dealers resulted in a rise in lending of £3,488mn in December. A further substantial increase in lending to miscellaneous financial intermediaries (+£1,539mn) more than offset a net repayment of £329mn from investment & unit trusts, so that overall lending to other financial intermediaries was strong for the second month running.
* Lending to non-financial firms
Lending to real estate was the only sector to see a significant rise during the month (+£853mn). There were falls in lending to construction companies (-£265mn), hotels & restaurants ( £167mn), retailers (-£164mn), wholesalers (-£156mn), and water supply (-£104mn). Within the manufacturing sector, increased lending to miscellaneous companies (+£125mn) was more than offset by net repayments from food, beverage & tobacco companies (-£176mn).
