Consumer credit becomes “weaker”

The provision of consumer credit became “weaker” last month, according to a newly released report.

It declined by a total of £0.2 billion during February, compared to a £0.2 billion increase in January, according to the Bank of England.

Net lending for loans and advances dropped by £0.4 billion, while credit card borrowing rose by £0.2 billion.

Combined, these figures took the yearly growth rate for consumer lending to fall to 3.4 per cent, the body noted.

However, there was a slight improvement in the flow of mortgages between January and February, with this figure standing at 37,937 in the second month of 2009.

But the amount of people being approved a remortgage – possibly as a form of debt solution – dropped between the two periods.

Commenting on the data, the Council of Mortgage Lenders stated: “We will need to see a few more months’ figures before we can say with any confidence that market conditions are showing a fundamental improvement.”

By Jamie Price