The British Banking Association (BBA) has said that “relatively subdued” consumer spending should not be interpreted as a warning that the UK is slipping into a downturn.
The comments came as the BBA issued its latest borrowing figures, showing that the amount borrowed on homeowner loans, unsecured credit and overdrafts rose by £505 million in February, compared to £604 million in the same month last year.
The amount borrowed on credit cards increased by £183 million over the month, compared to a £113 million increase in January.
The BBA said that these figures remain broadly inline with the average over the last six months of £173 million.
“There continue to be signs of consumer caution, as unsecured credit demand remained relatively subdued and deposit growth was above average,” said David Dooks of the BBA.
“Just as we did not regard the above-trend rises in the major banks’ net mortgage lending towards the end of 2005 as heralding a sustained upturn in mortgage market activity, we do not now see the moderately weaker figures since as signalling a downturn, particularly with reports of house prices picking up in 2006 so far.”
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