12 February 2007
Unsecured personal borrowing during 2006 increased at its slowest rate since 1994, according to the findings of Alliance & Leicester's Borrowing Monitor.
While mortgage borrowing has increased, lending on credit cards and personal loans has slowed.
Chris Rhodes, Director of Retail Banking at Alliance & Leicester, commented: "We have entered 2007 with a reduced appetite for borrowing and house buying since last summer."
In the last six months of 2006, homeowners with mortgages have reduced their unsecured borrowing by 3%, equating to £197.
Even though those without mortgages have increased the amount they borrow through personal loans and credit cards, by £98 on average, it is at a slower rate than in the past.
Interest payments now account for 16.5% of household income, compared to 14.1% three years ago and 30.1% in 1990.
Mr Rhodes added: "Consumers have shown an unprecedented appetite to reduce their unsecured borrowing, while their incomes have continued to grow and interest costs on their unsecured borrowings have fallen.
"This will have taken some of the sting out of the latest increase in base rates."
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