Gross mortgage lending up for August – BBA

The data from the British Bankers Associaition also reveals that consumer credit continues to show annual growth of over 6 per cent reflecting fairly strong retail sales and in the case of personal loans and overdrafts favourable interest rates.

Non-financial companies deposits increased by an average of around £2-3 billion a month in 2015 but fell back in the first half of 2016 and are currently growing at an annual rate of 3.8 per cent compared with around 10 per cent in 2015.

Dr Rebecca Harding, BBA chief economist, said: “The High Street Banking statistics published today point to a softer housing market, strong consumer credit and slightly weaker business borrowing in August. The data was collected before the Bank of England reduced interest rates to 0.25 per cent and so give an indication of some of the underlying pressures that the MPC was responding to when it made this decision.

“Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector.

“Given the low interest rate environment and high levels of confidence during the summer, the strong credit growth can be interpreted as strong consumer sentiment.

“Company deposits grew at an annual rate of 3.8 per cent in August 2016 compared to 9 per cent in August 2015 suggesting that companies may be using their own internal resources to fund working capital and growth requirements.”