The Bank of England said that consumer lending increased by 2.005 billion pounds in November (the strongest growth since March 2017) after rising by 1.411 billion pounds in October (revised from 1.289 billion pounds). Economists had expected an increase by 1.4 billion pounds. This was mainly driven by increased net borrowing through credit cards, from 0.5 billion pounds in October to 1.0 billion pounds in November. Net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased from 0.9 billion pounds to 1.0 billion pounds.
Meanwhile, the net mortgage approvals rose to 50 067 from 47 888 in October (revised from 47 383). Economists had expected a rise to 48 500. While mortgage approvals reached a five-month high, they remained subdued due to the ongoing impact of rising borrowing costs on housing activity. Net approvals for remortgaging increased to 27 000 from 24 000 in October. The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages increased in November by 9 basis points, to 5.34%. Similarly, the rate on the outstanding stock of mortgages saw a 7 basis point increase, to 3.27% in November.
The report also showed that mortgage lending to individuals was at net zero in November compared to 0.1 billion pounds of net repayments in October. The annual growth rate for net mortgage lending reached 0.3% in November, the lowest since the monthly series began in March 1994.