Latest figures from the Major British Banking Groups for December 2003 show that mortgage lending rose by £5.4 billion.

After November's smaller underlying rise of £4.8 billion, December's increase was back in line with the recent trend. Unsecured personal lending rose by £0.7 billion, though within this, card borrowing was again modest, rising by just £0.2 billion.

Total net sterling lending to the UK private sector increased by £10.6 billion (+1.1%) to £961.9 billion says the BBA report. This was not as strong as the previous month's underlying rise of £15.1 billion, though it was above the recent monthly trend.

Lending to non-financial companies fell by £0.6 billion. Though lending to real estate companies continued to rise strongly (+£0.8 billion), lending to other companies contracted, with net repayments coming from construction companies, hotels & restaurants, wholesalers, retailers, whilst overall lending to the manufacturing sector fell for the 8th consecutive month.

Lending to non-bank financial companies again made a significant contribution to the overall rise in lending. Securities dealers' funding requirements rose substantially, by £3.5 billion and lending to miscellaneous intermediaries rose by £1.5 billion

Deposits from the private sector rose by £3.4 billion (+0.5%) to £669.7 billion. Of the rise, personal deposits accounted for a strong £2.7 billion at the year-end, after allowing for seasonal factors.

David Dooks, BBA director of statistics, said: "December's rise in total lending reflected demand from the financial sector and individuals.”

“Mortgage lending growth was back on trend, after a dip in November, though consumer credit and in particular, card borrowing appear to have mirrored the reports of weak Christmas spending.”