UK households and businesses continued to increase their deposits in banks and building societies in May.
Figures released this morning by the Bank of England show that cash held by households, non-financial businesses, and financial businesses rose by £52.0 billion, following large increases in March and April.
Households’ deposits increased by a record £25.6 billion in May, following strong increases in March (£14.3 billion) and April (£16.7 billion).
In the six months to February 2020, household deposits rose by an average of £5.0 billion per month. The increase in May was primarily driven by deposits in instant access accounts
At the same time, people are paying off loans.Households repaid more loans from banks than they took out. A £4.6 billion net repayment of consumer credit more than offset a small increase in mortgage borrowing.There were repayments on both credit card lending (£1.8 billion) and other forms of consumer credit (£2.8 billion).
Approvals for mortgages for house purchase fell further in May to 9,300. Households borrowed an additional £1.2 billion secured on their homes.
This was slightly higher than the £0.0 billion in April but weak compared to an average of £4.1 billion in the six months to February 2020. The increase on the month reflected more new borrowing by households, rather than lower repayments.
