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The British Banking Association (BBA) has released its report concerning the main high street banks’ figures for June 2011. The BBA is the leading trade association for the UK banking and financial services sector and represents over 200 banks.
Personal deposits and savings in the High Street banks rose by £6.1bn in the first six months of 2011, the British Bankers’ Association (BBA) said. That compares with £15.9bn in the same period of the previous year. There was concern that personal deposits are growing slowly and suggestion that this may be a result of people using savings to pay higher household bills.
Most people are facing rising household bills with inflation currently at 4.2% and salaries stagnating. The most notable factors in rising household bills are increases in drivers’ fuel costs and the cost of gas and electricity for heating the home. Three of the big six energy suppliers have announced price rises to come into effect in the coming weeks, which could add to this trend.
Interest rates are also keeping returns for savers at relatively low levels at present. With no incentives to save money and the pressure to pay rising essential bills there is no encouragement for people to save, which may be contributing to trouble in the mortgage market.
The BAA report also signalled that the mortgage market remains weak. “Banks continue to lend for house purchase but the weak mortgage market is self-evident, although some growth is coming from the buy-to-let sector to meet demand for rental properties,” Mr Dooks the BBA’s statistics director said.
There was good news in that annual growth of the banks’ net mortgage lending was 1.8% in June, remaining well ahead of the 0.7% for the whole mortgage market in May.
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