---
title: "UK households borrowed a record amount in August as mortgage approvals fell"
url: "https://etf.net/news/uk-households-borrowed-a-record-amount-in-august-as-mortgage-approvals-fell-2026-09-29"
published_at: "2026-09-29T12:01:09.092Z"
updated_at: "2026-09-29T12:01:09.092Z"
byline: "ETF.net Research"
---

# UK households borrowed a record amount in August as mortgage approvals fell

Net unsecured lending rose by £2.464 billion in August, the biggest monthly increase since records began in 1993, the Bank of England said on Tuesday, September 29, while mortgage approvals fell to 54,918.

By ETF.net Research. Published Sep 29, 2026.

British households borrowed more on credit cards and loans in August than in any month since records began, the Bank of England said on Tuesday, while mortgage approvals fell.

Net unsecured lending, debt not backed by a house, rose by **£2.464 billion**. That was above the £1.9 billion economists had expected, and the biggest monthly increase, in pounds, not adjusted for inflation, since these records started in 1993. The jump from July was mostly on credit cards, where borrowing rose to £1.2 billion from £900 million.

The borrowing comes as the Bank's rate-setting committee is already split. On Thursday, September 17 it voted 6-3 to hold Bank Rate, its main interest rate, at 3.75%, and three of the nine members wanted it raised to 4%. Consumer prices were 3.1% higher than a year earlier in August, against the Bank's 2% target, and the Bank expects inflation slightly above 4% in the first quarter of next year, based on energy prices on September 14.

The committee said above-target inflation, heading into the next round of wage deals, could increase price pressures.

Katie Clinton, head of financial services advisory at KPMG UK, said the borrowing comes alongside a two-year high in consumer confidence, driven by a better outlook for personal finances and economic conditions. Inflation is also squeezing incomes, she said, and stronger borrowing may reflect people using credit to get by.

Households were setting money aside at the same time. They deposited £4.7 billion with banks and building societies, up from £3.8 billion in July, including £4.4 billion into individual savings accounts.

Lenders approved **54,918** mortgages for a house purchase, short of a recent six-month average of around 60,100. That was down from 55,928 in July, and below the 56,100 economists had expected.

Lucian Cook, head of residential research at Savills, said this was the fourth month in a row below 60,000.

"The weakness in these numbers reflects the recent volatility in the mortgage markets, which have made it more expensive for people to take on a bigger mortgage," he said.

Clinton said a further fall in approvals points to affordability pressures still weighing on housing demand, as shocks from the Iran conflict push up inflation and mortgage rates.

The government's Budget is in October, and the Bank's next rate decision is on Thursday, November 5.

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