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BoE M4 and lending to individuals data, small miss

UK DATA
DataHomepageData BulletBulletMarketsFixed Income BulletsForeign Exchange Bullets

Mortgages: net repayment of GBP0.8bn (Nov-23: zero), BBG consensus was GBP0.2bn of net new lending. Total approvals were 50,500 (from 49,300 in Nov but consensus was 53,000). The numbers remortgaging ticked up through the 6M average, indicative that consumers are starting to try to roll off higher rates.

  • Effective interest rate (EIR) on new mortgages was 6bp lower at 5.28%, the first drop since Nov-21. The rate on stock continues gentle uptick; +9bp to 3.36%.
  • Consumer credit: net lending of GBP1.2bn (est: 1.5bn), down from 2.1bn in Nov-23, led by credit cards.
  • Corporate lending (to PNFCs) was back into small net borrowing (from net repayment in Nov-23) but SMEs continued to paydown debt, on average faster than in the prior month.
So, a small miss on lending appetite, relative to expectations which is a muted run-rate into 2024 for the UK lenders (most affected: Lloyds and NatWest). There an interest asset quality point on the increasing EIR on stock and the uptick in remortgages which gives a sense of the stress households continue to be under. NPL figures for the banks are more tied to unemployment, generally, but still one to watch.
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Mortgages: net repayment of GBP0.8bn (Nov-23: zero), BBG consensus was GBP0.2bn of net new lending. Total approvals were 50,500 (from 49,300 in Nov but consensus was 53,000). The numbers remortgaging ticked up through the 6M average, indicative that consumers are starting to try to roll off higher rates.

  • Effective interest rate (EIR) on new mortgages was 6bp lower at 5.28%, the first drop since Nov-21. The rate on stock continues gentle uptick; +9bp to 3.36%.
  • Consumer credit: net lending of GBP1.2bn (est: 1.5bn), down from 2.1bn in Nov-23, led by credit cards.
  • Corporate lending (to PNFCs) was back into small net borrowing (from net repayment in Nov-23) but SMEs continued to paydown debt, on average faster than in the prior month.
So, a small miss on lending appetite, relative to expectations which is a muted run-rate into 2024 for the UK lenders (most affected: Lloyds and NatWest). There an interest asset quality point on the increasing EIR on stock and the uptick in remortgages which gives a sense of the stress households continue to be under. NPL figures for the banks are more tied to unemployment, generally, but still one to watch.