Lending remains robust ahead of November rate rise

Mortgage lending rose by £5.5bn in October, the latest figures from the Major British Banking Groups has revealed.

Ahead of November’s 25 basis point interest rate rise, the robust lending figures were up on September’s rise of £5.3bn.

Total sterling lending to the UK private sector was up by 0.9%, showing a net underlying increase of £11.8bn to £1.2bn.

Unsecured personal lending rose slightly in October, continuing the picture of little change, on average, over the previous six months.

Loans and overdrafts rose by £0.8bn, whilst underlying credit card borrowing fell by £0.4bn, which was the sixth successive decline.

Deposits from the private sector rose by £5.3bn (+0.6%) to £917bn. Personal deposits increased by £1.6bn, compared with average growth of £3.1bn over the previous six months.

David Dooks, director of statistics at BBA, says: “October’s net mortgage lending continued on the high plateau we have seen since the summer, with demand remaining robust ahead of the November increase in interest rates.

“The picture in unsecured lending was mixed. Credit card lending continued to fall, as it has in most months of this year, though other consumer credit was stronger than of late.

“The weak personal deposit inflow in October reflected the reversal of September end-month effects that produced the high figure seen in the previous month.”