BBA: Unsecured borrowing very subdued

The BBA also revealed that underlying net lending on credit cards grew by £0.1 billion, compared with a £0.3 billion decline in October.

This is the first time in many months that BBA figures have not shown personal loan and overdraft lending to have increased as credit cards decreased.

David Dooks, BBA director of statistics, said that unsecured lending “remained very subdued”, despite the unusual rise in credit card borrowing.

“Monthly spending on credit cards and the value of new personal loans taken out have been generally lower in 2006 than in the previous couple of years, while repayment levels have been maintained, leading to this year’s picture of subdued borrowing,” he explained.

According to research by Lloyds TSB, eight in ten UK consumers expect the cost of borrowing to be higher at the end of the year, with less than one in 20 expecting rates to fall.