According to the report from Bank of England, UK households and businesses continued strongly increasing their sterling money holdings in June. The £16.0 billion increase was, however, less than the £53 billion monthly average increase seen since March. Interest rates on deposits fell further in June - new time deposit rates fell 14 basis points to 0.73%.

Household’s net borrowing was £1.8 billion in June following large repayments in previous months. The increase can all be accounted for by mortgage borrowing. Mortgage interest rates were broadly unchanged.

Approvals for mortgages for house purchase increased to 40,000 in June, up from the record low of 9,300 in May, but still below February’s pre-Covid level of 73,700.

Households repaid £86 million of consumer credit, on net, in June, following average monthly repayments of around £5 billion since March. The interest rate on new consumer credit borrowing fell 68 basis points to 4.42% in June, while credit card interest rates fell 42 basis points to 17.94%.

Corporates raised an extra £10.7 billion of finance in June, almost all from financial markets. SMEs continued borrowing from banks, drawing £10.2 billion of extra loans, while large businesses repaid loans.