26 October 2006
The British Bankers' Association's (BBA's) net figures for individual lending confirmed this week that consumer credit remains subdued.
September saw a lower level of personal loan lending than the previous month making net lending £198 million after seasonal adjustment, £53 million less than the recent monthly average.
The annualised rate of total consumer credit growth has more than halved from this time last year and stands at a little under 3% per year.
The subdued rate of personal lending could prove to be the quiet before a storm, as figures released today by Scottish Widows hint that many homeowners are on a financial knife-edge.
The survey found that 57% of householders' income is spent on essential items such as mortgage payments, food, utilities and council tax.
Alarmingly, 27% of households admitted to having no savings whatsoever and a further 25% claimed to have less than £3,000.
If the worst scenario occurs, the lack of immediate funds could influence consumers to take out a personal loan to help get by.
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