Bank of England reports UK funding volumes rise in Q3 2025

Published 16/10/2025, 10:00
© Reuters.

Investing.com -- The Bank of England’s latest quarterly survey showed that total funding volumes for UK banks and building societies increased in the three months to end-August 2025 and are expected to continue rising through November.

According to the Bank Liabilities Survey for Q3 2025 published on Thursday, "other" funding, which includes wholesale debt funding, wholesale deposits, and central bank operations, increased while retail deposit funding remained unchanged.

The cost of "other" funding decreased relative to reference rates during Q3, while retail deposit funding costs increased. Looking ahead to Q4, lenders expect "other" funding costs to decrease slightly while retail deposit costs will increase slightly.

The survey revealed that deposit supply from households decreased slightly in Q3 and is expected to remain flat in Q4. Deposits from private non-financial corporations decreased more significantly in Q3 but are also projected to stabilize in the coming quarter.

Lenders reported an increase in the proportion of wholesale market funding from long-term instruments in Q3, with further increases anticipated in Q4. Demand for wholesale bank debt grew from both UK and non-UK investors during the quarter, with slight increases expected to continue.

On the capital front, total capital levels remained unchanged in Q3 but are expected to increase in Q4. The average cost of capital decreased during the quarter but is projected to rise slightly in the next three months.

The internal "transfer price" charged to business units to fund new loans was unchanged in Q3 and is expected to remain stable through the end of November.

The Bank of England conducts this quarterly survey to better understand how lenders’ liabilities and capital influence credit and monetary conditions. The Q3 survey was conducted between September 1-19, 2025, with the next report scheduled for January 15, 2026.

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