UK consumer credit rose less than predicted in August, with an increase of £755 million against a forecast £900 million, down from the previous month’s £1.1 billion rise.
The increase in total net lending to individuals was lower than in July, Bank of England lending statistics show, while net credit card lending fell by £0.3 billion, the biggest decline since 1993.
The annual growth rate of consumer credit also continued to fall at an accelerated rate, to 6.6 per cent.
Cutbacks in consumer credit may indicate that the surprise interest rate rise on August 3rd alerted indebted Britons to their situation, as total outstanding UK debt rose to a record £1.25 trillion. With the rates rising, many customers have been urged to seek out new deals in order to keep their repayments down.
Mortgage lending meanwhile rose by £9.1 billion against a £10 billion forecast, suggesting that August’s rate hike may be taking effect in the housing market.
The ease in mortgage borrowing may help mitigate what some believe is a tendency to assume mortgages without thinking through the financial implications, as a survey from
Citizens Advice this month found that as many as 777,000 Britons have missed one or more mortgage payments in the past year.
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