High street bank lending stable at 2 per cent

Consumer borrowing from High Street banks remained stable at 2 per cent in July, compared with 1.9 per cent in the previous month, according to latest data.

UK Finance, the trade body for 300 finance, banking and payments providers, also estimates that overall gross mortgage lending in July was £23.0 billion.

Accounting for seasonal factors, the figure is above the average lending figures seen over the past year.

First-time buyers and remortgage activity on the part of homeowners has supported lending for some time, but we anticipate the pace of growth to slow slightly, dampened by a potentially more challenging economic outlook.

Annual growth in consumer credit provided by High Street banks has increased from 1.9 per cent to 2.0 per cent.

Eric Leenders head of personal at UK Finance, said: “Consumer borrowing from high street banks remained stable in July, as continued pressure on household budgets reduced spending and saving.

“It is business as usual for business lending as companies continue to borrow less and build their reserves, increasing deposits at an annual rate of 7.5 per cent, while larger corporates are using the capital markets for funding.

“Steady levels of mortgage activity seen through the first half of the year continued into July. First-time buyer numbers continue to be strong, helped in part by government schemes. But that has been offset by home movers, where a shortage of homes on the market is limiting their activity.”