* Total net sterling lending to the UK private sector increased, by an underlying £15.0bn (+1.6%) to £955.2bn. This was significantly stronger than the previous month's rise of £6.1bn, as company lending was much more prevalent in the month.
* Mortgage lending rose by £4.8bn, after allowing for the net effects of securitisations in the month. Unsecured personal lending rose by £0.8bn (in line with the recent average) though within this, card borrowing showed only a small rise over the month.
* Lending to non-financial companies (+£4.1bn) was strong overall in November, though concentrated in particular sectors. Lending to hotels & catering was inflated by takeover activity in that sector; lending to real estate companies continued its strong trend growth; and lending to retailers also rose. In contrast, there were net repayments from transport & communications (for the 6th month in succession) and lending to manufacturers saw its 7th consecutive monthly contraction.
* Lending to other financial companies made a significant contribution to the overall rise in lending. Internal group investments and funding the acquisition of a mortgage book were reflected within a £2.7bn increase in lending to miscellaneous financial intermediaries, while securities dealers' funding requirements rose by £0.9bn.
* Deposits from the private sector rose by £3.5bn (+0.5%) to £666.2bn. Following very strong inflows in the previous month, personal deposits were weaker than of late, though still accounting for half the rise.
David Dooks, BBA director of statistics, said:
"Whilst the November rise in interest rates may not have had an immediate impact on consumer demand, growth in the banks' mortgage lending was slower than the strong rise in October. It is too soon to say whether this signifies moderating demand or simply a timing shift between the two months. Within consumer credit, the small rise in card borrowing possibly suggests sluggish retail sales in November.
Increased lending to financial companies was inflated by group restructurings, whilst lending to non-financial companies, partly due to takeover funding, was stronger than of late."
Analysis of MBBG sterling lending to UK public and private sectors
* Lending to individuals (after allowing for securitisations, loans removed from special purpose vehicles, transfers, acquisitions, etc - see Note 4 below)
Net lending rose by £5,566mn in November, compared to £6,429mn in October and +£6,478mn in November last year. Mortgage lending accounted for £4,805mn of the rise, compared to October's +£5,798mn. Growth in other personal credit was in line with the recent monthly average (loans and overdrafts rising by £762mn), though card borrowing was notably weak (+£60mn).
* Lending to financial firms
Strong lending to miscellaneous financial intermediaries (+£2,745mn) reflected internal group investments and funding the acquisition of a mortgage book by a group subsidiary. The requirements of securities dealers resulted in a rise in lending of £917mn in November, lending to investment & unit trusts rose by £504mn and lending to insurance companies & pension funds rose by £347mn. Offsetting these rises in part, was a fall in lending to leasing companies (-£478mn).
* Lending to non-financial firms
Lending to hotels & restaurants (+£1,378mn) was the largest sectoral increase in lending, though the rise was inflated by funding takeover activity. Lending to real estate rose by £972mn and lending to retailers rose by £298mn. Partly offsetting these increases, there were falls in lending to transport & communications (-£314mn) and manufacturers (-£159mn).
