Consumers scale back on unsecured debt

by Gill Montia

Story link: Consumers scale back on unsecured debt

The Bank of England has published data for June revealing a slowdown in the amount of unsecured debt taken on by consumers.

The figures, which cover all forms of consumer credit, show a £0.9 billion rise in unsecured lending.

The increase compares with £1.3 billion in May and an average rise of £1.2 billion over the previous six months.

In June, £0.4 billion was added to the nation’s credit card bills, slightly less than in May.

Other unsecured lending rose by around £0.4 billion with growth also down on the previous month.

Credit card providers and lenders have been cutting back on lending throughout the credit crisis with some, such as Barclays’ FirstPlus, withdrawing from the market altogether.

However, the slowdown in consumer debt accumulation may also be connected to the housing market.

The number of house sales completed in June of this year fell by 45% when compared with the same period of 2007 and the stagnation caused by a shortage of mortgage funds and a lack of confidence in the market is being seen across many retail sectors.