The Bank of England has indicated that there is likely to be less money being lent by financial service firms over the course of the next few months than has been the case in recent years.
As millions of people around the UK struggle to solve their debt management problems, the bank has reported that less money was borrowed during the final quarter of 2007 and has predicted that this trend will continue.
Mortgage borrowing is a major cause of debt management difficulty and figures released by the bank show that demand for lending in the UK’s housing sector fell more sharply than expected in recent months.
Commenting on the latest statements from the bank, Howard Archer from Global Insight said: “The availability of credit for households [is] expected to diminish further over the first quarter of 2008, which will add to the growing downward pressures on consumer spending.”
The cost of borrowing in the UK was increased by the Bank of England five times in a year from August 2005 and currently stands at 5.5 per cent.