Consumer borrowing plummets as BS savings accounts raided

by Gill Montia

Story link: Consumer borrowing plummets as BS savings accounts raided

New figures from the Bank of England show consumer lending falling by a net £0.6 billion in October, with the decline well below the previous six month average of -£0.1 billion.

While credit card lending rose by £0.1 billion other loans and advances fell by £0.7 billion.

However, the Bank said the value of mortgages approved for house purchases rose for the 11th consecutive month to £8 billion in October, up from £7.6 billion a month earlier.

Meanwhile, the Building Societies Association (BSA) has reported a net outflow of savings for the eighth consecutive month.

Balances held in savings accounts at the UK’s mutuals fell by £929 million in October.

After interest credited to accounts is excluded, the sector saw a combined net withdrawal of £1,240 million.

BSA director general, Adrian Coles, comments: “There is little incentive for people to increase savings whilst the Bank rate remains at its current low level, and many may opt to repay debt instead.”