Loan figures remain steady as credit growth weakens

Wednesday, January 4, 2006

November lending, through credit card or loan uptakes, increased at its slowest rate for more than a decade, according to the latest figures.

The Bank of England said that the annual rate of consumer credit growth (including unsecured loans and credit cards) stood at 9.8 per cent for November 2005, a fall from the 10.5 per cent of October last year.

Net consumer credit stood at £0.9 billion, a fall of £0.3 billion from October 2005. This was largely due to the fall in credit card borrowing, as credit through an unsecured loan and other borrowing was in line with October figures.

"Very muted consumer credit growth in November indicates that consumers are still cautious overall in their behaviour," said Howard Archer, chief UK economist with consultancy firm Global Insight.

"Record high debt levels and rising unemployment mean that there is an increased need for many consumers to try and repair their balance sheets."

The total value of debt in the UK now stands at £1,148 billion.

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