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UK households and businesses showed mixed borrowing patterns in July, with mortgage demand softening but consumer credit and corporate lending holding firm, data from the Bank of England showed Monday. Net mortgage borrowing by individuals fell to £4.5 billion in July from £5.4 billion in June, while mortgage approvals for house purchases edged up slightly to 65,400 from 64,600. Approvals for remortgaging fell to 38,900 from 41,600. The average interest rate on newly drawn mortgages fell for a fifth consecutive month to 4.28% in July, down from 4.34% in June. Consumer credit growth remained steady. Net borrowing rose to £1.6 billion in July from £1.5 billion in June, driven by credit card borrowing of £0.8 billion and £0.9 billion from other forms such as personal loans. The annual growth rate for all consumer credit rose to 7.0%, from 6.8%. Households added £7.3 billion to their bank deposits in July, slightly down from £8.0 billion in June. Most of the increase came from interest-bearing sight accounts and ISAs. Private non-financial corporations raised £300 million of net finance in July, down from £1.1 billion in June. This included £2.2 billion in bank loans and £500 million in bond issuance, offset by £2.9 billion in equity buybacks. Borrowing by large businesses grew at an annual rate of 8.0%, up from 6.7% in June. For SMEs, the growth rate rose to 0.9% from 0.3%, the strongest pace since August 2021. The net flow of sterling money slowed to £7.1 billion in July from £11.4 billion in June. Net lending to households and PNFCs totalled £7.7 billion, down from £19.9 billion. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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