The British Bankers' Association (BBA) reports that personal deposits rose by 6.2% over the year to January. However, net mortgage borrowing from the banks grew by a mere 0.2% in the year to January.
The reason for such an imbalance (despite pressure from the government for the banks to lend more)?
The BBA blame the weather!
“January’s severe weather impacted adversely on what was already a subdued picture of borrowing demand from households and businesses. While general economic growth stalls, low consumer and business confidence generates a natural tendency to restrain borrowing appetite, repay borrowing where possible and to build up cash and savings as a buffer.”Weasel words!
The reality is that banks are doing all they can to shore up their balance sheets, lest another self inflicted financial storm rocks their boat.