The Bank of England said that consumer lending increased by 1.098 billion pounds in October after rising by 1.221 billion pounds in September (revised from 1.231 billion pounds). It was the weakest growth since June. Economists had expected an increase by 1.30 billion pounds. Net borrowing through credit cards increased from 0.4 billion pounds in September to 0.5 billion pounds in October, while net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) fell from 0.8 billion pounds to 0.6 billion pounds. The annual growth rate for all consumer credit was 7.3% compared to 7.5% in September.
Meanwhile, the net mortgage approvals rose from 65,650 in September to 68,303 in October, the highest level since August 2022. Economists had expected a decline to 64,500. Approvals for remortgaging (which only capture remortgaging with a different lender) rose for the third consecutive month to 31,400 in October, a month-on-month increase of 500. The ‘effective’ interest rate on newly drawn mortgages decreased by 15 basis points, to 4.61% in October, the lowest since May 2023. The rate on the outstanding stock of mortgages rose by 4 basis points, to 3.78%.
The report also showed that net borrowing by large non-financial businesses rose to 3.3 billion pounds, from 0.8 billion pounds in September. Net borrowing by small and medium-sized non-financial businesses (SMEs) increased to 0.6 billion pounds, up from repayments of 0.6 billion pounds in September.