Private Sector Credit - In Moderation

• Credit to the private sector continued to grow at a modest pace of 0.4% in September. Annual growth edged slightly higher to 4.6% from 4.5% previously, the fastest pace in four months.
• The improvement in annual growth was mostly a reflection of business credit. Business credit growth has gained some traction in recent months, and in September recorded its strongest annual growth in business credit in just over a year. It provides a positive signal for business spending, and corresponds with above-average levels of business conditions in surveys. 
• The picture remains soft for lending to other sectors. Housing credit rose a subdued 0.3% in September, driven by weakness in investor housing credit growth. On an annual basis, credit for investor housing grew 1.4% in September, the weakest annual pace since the series became available in 1991.
• Other personal credit was flat in September, and has not recorded growth for two years. On an annual basis, other personal credit contracted 1.5%, which was the weakest in four months.
• The improvement in business credit in recent months is encouraging. However, there continues to be headwinds for credit growth, particularly for housing, given tighter lending conditions. 

 

Please see the attached report for more information.

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