The great unacknowledged fact about the UK economy is the extraordinary degree of deleveraging achieved by the household sector. Feb’s broad money data tells us it’s still going on at record pace.

In February, household’s M4 assets rose by £30.1bn yoy (1.7% yoy), whilst h’hold’s M4 credit rose by only £5.1bn yoy (or 0.3%). That leaves households with net M4 assets of £245.2bn, up £25bn yoy (or 11.3%). And it’s still going on: net h’hold assets rose £4.4bn in February alone.

So even whilst mortgage approvals were up 37.5% yoy by number and 22.4% yoy by value, it should be no surprise that outstanding mortgage debt fell 0.6% yoy. Households are simply paying down as fast as they can.

In my data, this level of net household assets is unprecedented: remember back in 2009, h’holds had £300bn in net liabilities!

For the banks, it’s becoming a problem: even when the banks are scrambling to sell mortgages, the total won’t rise, and the net M4 / M4 credit ratio is stuck at a profit-shrinking 81.7%!