But the gloomy figures were ignored by the stock market, where nearly pounds 11bn was added to the value of London shares.
The FT-SE index of the top 350 stocks surged to a record, although the more familiar 100- share index closed a couple of points off its peak. The FT-SE 100 ended the day 49.4 points higher at 2,789.7.
Bank and building society lending dropped by pounds 600m in November after an average rise in borrowing of pounds 2.5bn in each of the previous six months. The broad M4 measure of the money supply - which includes cash and bank and building society accounts - fell by a seasonally adjusted 0.2 per cent in November. This cut annual growth in M4 to 4.7 per cent, the lowest rate since the 1960s.
Manufacturers repaid pounds 121m of debt in November, while individuals' borrowing was at less than half the level for the month in 1991. Simon Briscoe, economist at Midland Montagu, said the figures were 'universally grim' and pointed to feeble, patchy recovery.
Building societies were battered last month by a net outflow of savings and weak demand for mortgages.
In November, pounds 184m was drained from building society coffers following a month when there was a net inflow of pounds 281m. Some people are using savings to reduce debts.
On the lending side, net advances by building societies remained low at pounds 731m - the third consecutive month that lending has been below pounds 1bn. Net new commitments, which give a view of actual lending about 10 weeks hence, showed a drop from the modest pounds 2.17bn October level to pounds 1.85bn.
Amid the gloomy news on prospects for recovery, the Government received a welcome windfall on the balance of payments. Central Statistical Office figures yesterday showed that Britain's current account deficit between July and September was more than pounds 750m smaller than first feared. The devaluation of sterling helped to boost net earnings from overseas investment from pounds 313m in the previous quarter to pounds 1.73bn, although this is not expected to be sustained.
The surplus on trade in 'invisible items' ballooned to pounds 1.07bn in the third quarter, compared with the CSO's provisional projection for the quarter of a pounds 300m surplus.
The invisible surplus gave a current account deficit of pounds 2.18bn for the quarter and just over pounds 8bn for the year so far. The Treasury said the figure was consistent with its pounds 12bn Autumn Statement for the year as a whole. The balance of earnings on overseas investments was helped by the relative weakness of the British economy. Foreign companies had depressed earnings from their British subsidiaries, while British-owned firms overseas were still relatively profitable.
The balance was further boosted by devaluation, which made foreign-currency earnings from British subsidiaries more valuable in sterling terms.
Devaluation also increased the sterling value of British overseas assets.
The value of British-owned overseas assets was pounds 18.1bn greater than the value of foreign- owned assets in Britain at the end of the third quarter. Three months earlier, Britain had been a net debtor to the tune of pounds 600m.
The impact of the summer currency crisis also showed up in a dramatic increase in the amount of lending and borrowing overseas by British banks in the quarter. This reflected both speculation and the pounds 7.25bn borrowing package arranged by the Government to try to support the pound in August.
Government borrowing overseas was boosted to pounds 7.4bn in the third quarter by borrowing from overseas central banks to finance support buying of sterling. This was up from pounds 465m in the previous quarter, but is likely to be reversed relatively quickly as the central banks are paid back.
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