Consumers ‘cutting back on borrowing’

Credit consumers across the UK are cutting back on the amounts of money they borrow from high-street lenders, according to the most recent data from the British Bankers Association (BBA).

Millions of people in the UK are struggling to become
debt free and the association reports that the growth in gross lending nationwide was slower last month than has been the case of late.

Consumer credit lending grew by around £300 million last month, which was a considerably slower rate of increase than the previous month when Britain’s unsecured borrowing grew by around £600 million.

“October’s data provide evidence of a rapidly slowing mortgage market and of consumers limiting their personal borrowing,” said the BBA’s statistics director David Dooks.

“Pressure on household finances, the cumulative impact of interest rate rises over the last year and the consequential impact of the credit crunch may well all have a part to play in suppressing current demand and supply.”

Including mortgage arrears, the overall debt management burden of the typical UK household is worth more than £55,000, according to data compiled by the Credit Action charity.