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Demand for credit on the increase

  • 01/02/2010

    New unsecured borrowing by UK consumers on credit cards, loans and overdrafts has exceeded the amount being paid back for the first time since June 2009.

    Unsecured consumer credit rose £52m in December, driven by credit card borrowing, according to new figures from the Bank of England said.

    The number of mortgages approved for house purchases dipped slightly compared with November 2009, to 59,023.
    This was still higher than the average of the past six months, when the housing and mortgage markets picked up.
    The trend during the recession has been for consumers to pay off debts, often instead of saving when interest rates are so low.

    For five consecutive months, repayments outstripped new unsecured consumer credit. However, in December, the trend reversed, the Bank of England's figures show.
    This was primarily the result of borrowing on credit cards, which rose by £195m. Demand for personal loans and overdrafts remained low, with repayments outstripping new borrowing by £143m.

     

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