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Further evidence of customers paying off their existing credit commitments instead of increasing them has emerged as consumer borrowing fell again. The number of new loans has decreased by the biggest amount on a month on month basis since the Bank of England began keeping records in 1993. Similar figures were released from the Building Societies Association (BSA) which show that there was far less money being deposited over the past eight months than withdrawn from accounts.
The amount of unsecured credit went down by £713 million during October against the higher figure in September. The figures do not include any mortgages taken out in the same period.
Borrowing on credit cards rose by £134 million during October but was completely cancelled out by the fall in other forms of credit by £713 million. This showed that paying back credit on bank loans, car loans and hire purchase agreement is a priority for borrowers as this was the fourth month in a row that people have re paid more than they borrowed. The amount outstanding is almost at the same level as in January 2008 when the figure was around £228 billion.
Source Article: Record fall in consumer borrowing says Bank of England [BBC.CO.UK]
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