Annual growth in personal deposits at record low, says report

Households are putting money aside in deposits at the weakest annual rate on record, according to a high street banking report.

Personal deposits – which include money put away in savings such as Isas as well as current accounts – increased by 0.9% annually in September, UK Finance said.

It is the smallest increase in trade association UK Finance’s records going back to October 2007.

The figures also suggest people want to be able to get their hands on their money quickly if needed, as instant access deposit levels were 3.1% higher than in September 2017.

Eric Leenders of UK Finance said: “Consumers are increasingly choosing to keep cash close to hand, with deposits held in instant access accounts showing steady growth.”

The figures also showed the number of mortgage approvals made to home buyers fell to a six-month low in September, with 38,505 approvals recorded.

Some 27,874 remortgage loans got the go-ahead, compared with 30,838 in August when the Bank of England base rate increased.

Howard Archer, chief economic adviser at EY ITEM Club, said: “Caution over making house purchases may well be magnified by current heightened uncertainties over Brexit.”

Mr Archer said potential buyers may also be concerned about further interest hikes over the medium term after August’s increase.

UK Finance said that over the past year, the outstanding level of credit card borrowing grew 5.7%.

Personal borrowing through loans and overdrafts grew by 2.3% in the year to September.

Mr Archer continued: “While consumer credit growth has edged up from its July lows, the impression remains that consumers have become relatively cautious in their borrowing while lenders have certainly become warier about advancing unsecured credit and tightened their lending standards.”