The figures show that:
* Total sterling lending to the UK private sector showed a net underlying increase of £11.8bn (+1.1 per cent) to £1,119bn. This was below the previous month’s rise of £13.7bn, though above the average of +£10.0bn over the previous six months.
* Net mortgage lending in July rose by an underlying £3.7bn, which was down from the previous month’s +£4.7bn and below the average of +£4.4bn over the previous six months. Growth in overall unsecured personal lending (+£0.4bn) was again relatively weak. Of this, loans and overdrafts rose by £0.3bn (compared with a recent average of +£0.5bn), whilst credit card borrowing increased by only £0.1bn.
* Lending to real estate companies was the largest component of lending to non-financial companies, rising by an underlying £1.1bn. Elsewhere, lending to food, beverages & tobacco rose by £0.6bn (partly influenced by takeover activity), lending to retailers rose by £0.4bn and lending to construction rose by £0.1bn. Partly offsetting these rises were net repayments from hotels & restaurants and wholesalers.
* Deposits from the private sector rose by £8.5bn (+1.1 per cent) to £791bn. Of the total increase, personal deposits accounted for £3.1bn, only slightly less than the previous month’s largest inflow (+£3.5bn) since July 2004.
David Dooks, BBA director of statistics, said: "July’s growth in lending to individuals slowed from the recent trend. This could have reflected, in the case of mortgages, consumers waiting for the widely anticipated cut in interest rates in August, or in the case of consumer credit, a possible impact of poor weather and the London bombings on consumer sentiment, but neither effect is certain, nor quantifiable. It is noticeable, furthermore, that personal deposit inflows were high for the second month running, again suggesting consumer caution."
Analysis of MBBG sterling lending to UK public and private sectors
Lending to individuals (after allowing for the effects of securitisations, loans acquired from special purpose vehicles, transfers, acquisitions, etc)
Net lending rose by an underlying £4,135mn in July, compared to £4,981mn in June and £5,843mn in July 2004. Mortgage lending accounted for £3,745mn of the rise, compared to the June’s rise of £4,670mn. Within consumer credit, July saw personal loans and overdrafts rise by £268mn compared to June’s +£33mn, while the increase in net credit card lending (+£123mn) was in line with the modest movements of the four months prior to June’s higher underlying rise of +£293mn.
Lending to financial firms
Lending to financial companies rose by £1,292mn in July, reflecting increased lending to miscellaneous intermediaries (+£2,082mn) partly offset by a fall in lending to securities dealers (-£924mn)
Lending to non-financial firms
An underlying rise in lending to real estate companies (+£1,118mn) was very much in line with the recent trend, whilst other sectors seeing increased lending were food, drink and tobacco companies (+£626mn) retailers (+£359mn) and construction (+£139bn). In contrast, there were net repayments from hotels & restaurants (-£224mn) and wholesalers (-£145mn)
