The Bank of England said that consumer lending increased by 1.58 billion pounds in April after rising by 1.102 billion pounds in March (revised from 0.875 billion pounds). This was the strongest growth since January 2024. Economists had expected an increase by 1.10 billion pounds. Net borrowing through credit cards increased to 0.8 billion pounds, from 0.4 billion pounds in March, while net borrowing through other forms of consumer credit (such as car dealership finance and personal loans) increased to 0.8 billion pounds, from 0.7 billion pounds. The annual growth rate for all consumer credit increased to 6.7% from 6.2% in March.
Meanwhile, the net mortgage approvals fell to 60,460 (the lowest value since February 2024) from 63,600 in March (revised from 64,310). Economists had expected a decline to 63,000. Approvals for remortgaging (which only capture remortgaging with a different lender) increased by 1,600, to 35,300 in April. The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages decreased to 4.49% in April. However, the rate on the outstanding stock of mortgages increased to 3.86% from 3.84%.
The report also showed that large non-financial businesses borrowed, on net, 1.3 billion pounds, compared to 1.8 billion pounds of net borrowing in March. Small and medium-sized non-financial businesses (SMEs) borrowing was flat, following net borrowing of 0.2 billion pounds in March.