When you get a loan, the bank creates a liability and deposit out of thin air. The deposit is a "demand deposit", which is effectively equivalent and fungible to central-bank-backed currency (hence the term "money" usually applies to both, though they are different things).
The bank needs no existing customer deposits to create a demand deposit and liability in your account.
You should run through your example again, except begin by creating a loan, rather than first beginning by a customer lending the bank a deposit.
The BoE article linked above is absolutely correct.
When you get a loan, the bank creates a liability and deposit out of thin air. The deposit is a "demand deposit", which is effectively equivalent and fungible to central-bank-backed currency (hence the term "money" usually applies to both, though they are different things).
The bank needs no existing customer deposits to create a demand deposit and liability in your account.
You should run through your example again, except begin by creating a loan, rather than first beginning by a customer lending the bank a deposit.
The BoE article linked above is absolutely correct.