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UK household borrowing picked up in November, with higher mortgage and consumer credit lending, while businesses returned to net borrowing after repayments in the previous month, according to money and credit data published by the Bank of England on Monday. Net borrowing of mortgage debt by individuals in the UK rose to £4.5 billion in November from £4.2 billion in October, reversing a decline in October from September. The annual growth rate of net mortgage lending accelerated a notch to 3.3% from 3.2% in the previous month, the highest since January 2023. Mortgage approvals for house purchase fell slightly, down by 500 to 64,500 in November, signalling some softening in future housing demand. In contrast, remortgaging approvals increased by 3,200 to 36,600, suggesting households continued to refinance in response to lower UK interest rates. The BoE made four cuts to its policy rate during 2025, reducing interest rates in February, May, August and December. The effective interest rate on newly drawn mortgages rose for the first time since February last year, edging up to 4.20% in November from 4.17% in October. The average rate on the outstanding stock of mortgages also ticked higher to 3.90%. Consumer credit borrowing also accelerated. Net borrowing by individuals increased to £2.1 billion in November from £1.7 billion in October, driven largely by stronger credit card use. Net credit card borrowing rose to £1.0 billion from £700 million, while borrowing through other forms of consumer credit, such as car finance and personal loans, increased slightly to £1.1 billion. The annual growth rate of total consumer credit rose to 8.1% from 7.5%, with credit card borrowing growth accelerating to 12%, its highest rate since January 2024. The effective interest rate on new personal loans rose for a fourth consecutive month to 8.7%, while credit card rates edged up to 22%. By contrast, overdraft rates fell to 22%. Households continued to build up savings. Deposits by households increased by £8.1 billion in November, compared with £6.7 billion in October. This was driven by inflows into interest-bearing sight deposits, individual savings accounts, and non-interest-bearing accounts, partly offset by withdrawals from time deposits. Interest rates on household deposits continued to drift lower. Business borrowing rebounded during the month. UK non-financial businesses borrowed a net £6.3 billion from banks and building societies in November, following net repayments of £1.2 billion in October. Large companies accounted for most of the increase, borrowing £6.0 billion, while small and medium-sized firms borrowed a net £200 million. The annual growth rate of borrowing by large businesses rose to 7.2%, while SME borrowing growth increased to 1.9%, the highest since July 2021. Interest rates on new loans to private non-financial corporations eased, with the average rate falling to 5.6%, while rates on new SME loans declined to 6.2%. Sterling net lending to households and private sector companies, measured by M4Lex, increased to £15.5 billion from £13.3 billion in October. Copyright 2026 Alliance News Ltd. All Rights Reserved.
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