Consumer credit down as many keen to 'reduce debt'

24/02/2010

Consumer lending fell in January, according to the latest figure from the British Bankers' Association (BBA).

More people may be turning away from new credit and looking to debt management plans to organise their finances.

According to the research, mortgage lending was "relatively weak", suggesting that December's higher rate had been pushed up as people rushed to buy before the end of the stamp duty holiday.

Consumer credit lending was also lower in January than at the end of 2009.

David Dooks, statistics director at BBA, commented: "After the Christmas period, demand for consumer credit was weaker in January, as people shied away, or were discouraged by the weather, from retail spending and held on to their deposits.

Howard Archer, chief UK economist at IHS Global Insight, told the Guardian that the fall in January's levels of consumer credit "was primarily the ongoing consequence of many consumers' desire to reduce their debt in the face of a still very worrying economic environment, low consumer appetite for new borrowing and a lack of availability of unsecured credit from banks".

Posted by Fiona Smith

Tags; Budgeting Advice,

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