Savings balances held with mutuals increase in November

Savings balances held at mutuals increased by £0.6 billion in November 2010, following a decrease of £1.1 billion in October. Excluding interest credited to accounts mutuals had a net receipt of £0.4 billion in November.

Commenting on the figures, Adrian Coles, Director-General of the BSA, said: "Savings flows can be quite variable on a month to month basis, and though it is pleasing to see balances held at mutuals increase in November it remains to be seen whether this is the beginning of a sustained trend. However, 2011 looks set to be another challenging year for retail deposit takers as household finances remain tight and the Bank Rate is likely to be held at its record low for much of the year."

Gross mortgage lending by mutuals in November was £2.0 billion, the same as in October. Mutuals approved mortgages of £1.9 billion in November, compared to £1.8 billion in October.

Commenting on the mortgage figures, Mr Coles said:  "Gross lending by mutuals was broadly flat on October, despite activity usually dropping off at this time of year. However, activity in the mortgage market next year is likely to continue to be relatively subdued because of challenges for lenders in raising funds for lending and reduced demand from mortgage borrowers until the outlook for the economy and labour market becomes more positive."