House purchase approvals dropping - BBA

The BBA’s latest data also showed consumer credit is now showing annual growth of over 7 per cent, reflecting strong retail sales growth in October supported in the case of personal loans by favourable interest rates.

Net capital market issues by non-financial companies increased by £3.3bn in October and in the ten months to October 2016, a total of £17.2bn (net) has been raised.

This alternative finance compares with an increase in bank borrowing of £7.9bn (net) over the same period.

Dr Rebecca Harding, BBA Chief Economist, said: “Consumer credit is now growing at its fastest rate since November 2006, reflecting strong retail sales growth. Consumer confidence remains robust as borrowers take advantage of record low interest rates.

“Mortgage approvals ticked up a little October. There has only been a relatively modest increase in activity since the Bank of England cut rates in August.

“Finally, there was a slight increase in business borrowing in October but this was driven by a one-off factor and will probably unwind next month. However, businesses are increasingly going back to capital markets as a means to raise funding. They also continue to hold cash deposits, suggesting that they are building up cash reserves for ready access to resources should the need arise.”