21 March 2006
Consumer borrowing is "relatively subdued" but we should not assume we are heading into an economic downturn, according to the British Banking Association (BBA).
Its figures compiled using data from the UK's biggest banks revealed that personal loans and overdraft borrowing increased by £505 million in February, compared with an increase of £640 million a month earlier.
The amount borrowed though credit cards saw an increase, rising by £183 million compared to £113 in January. Despite this greater rise, the organisation said that it was much in line with the six-month average of £173 million.
David Dooks, BBA director of statistics, said: "There continue to be signs of consumer caution, as unsecured credit demand remained relatively subdued and deposit growth was above average."
He added: "Just as we did not regard the above-trend rises in the major banks' net mortgage lending towards the end of 2005 as heralding a sustained upturn in mortgage market activity, we do not now see the moderately weaker figures since as signalling a downturn, particularly with reports of house prices picking up in 2006 so far."
The total amount lent to individuals rose by £5.11 billion in February, which was a smaller increase than occurred in December 2005, and also smaller than the previous February, when lending to private individuals increased by £5.42.
The vast majority of this lending came in the form of mortgage borrowing, which accounted for £4.43 billion of the rise.
Compare secured loans and find the best secured loan for you with the uSwitch.com loans comparison service