UK consumer credit increased by £0.8bn in September

Consumer credit increased by £0.8bn in September. This was less than in August, as new borrowing for car finance fell sharply.

The flow of mortgage lending increased to £3.9 billion in September, following two relatively weak months.

Net finance raised by private non-financial corporations (PNFCs) was negative in September. Within this, negative movements in bank lending, and equity and commercial paper issuance were partially offset by net positive bond issuance.

The net amount of new consumer borrowing, excluding mortgages, fell to £0.8 billion in September, down from £1.2 billion in August. The fall on the month was due to weaker net borrowing for other loans and advances, which fell from £0.7 billion to £0.3 billion. Within this, new borrowing for car finance fell sharply, consistent with very weak car registration numbers in September,1 while other borrowing, such as personal loans and overdrafts, was robust. Net credit card borrowing was £0.5 billion in September, unchanged on the month and broadly in line with the average of the previous 6 months.

The annual growth rate of consumer credit slowed further in September, to 7.7%, reflecting these weaker monthly lending flows. The annual growth rate was the lowest since June 2015, and well below the peak of 10.9% in November 2016.