The Bank of England has published its latest monthly Money and Credit report showing consumer credit growth was 8.6 percent in the year to March 2018, down from 9.4 percent in February. Outstanding balances for consumer credit stand at £209.2 billion exceeding the previous quarterly peak of £208.2 billion in the third quarter of 2008.

The data shows a monthly slowdown in the rate of growth in consumer credit lending.

Commenting on the figures Joanna Elson OBE, Chief Executive of the Money Advice Trust, said “While we have seen a slight ease in consumer credit growth this month, the overall levels remain worryingly high with outstanding balances at over £209 billion, and continuing to grow. For the majority of households, this is manageable and unlikely to be an issue at the moment. But for people, particularly on low incomes, where high living costs and slow wage growth continue to be a challenge, one small change could be all it takes to push them into financial difficulty.

“Nearly one in three of the people we help at National Debtline are already struggling with credit cards debts. I would encourage anyone struggling to meet day to day costs to exercise caution and seek advice before taking on additional borrowing.

StepChange Debt Charity Head of Policy Peter Tutton said “A decade on from the financial crisis, we must not lose sight of the impact of sustained pressure on already stretched household budgets in coping with the rising daily cost of living. We estimate that severe problem debt currently affects some 3.4 million people in the UK, so tackling and preventing vulnerable households from falling into problem debt should be high on the policymakers’ agenda. While the financial system may not be at risk of history repeating itself in terms of systemic failure, at household finances level the risks are all too real.

“Regulators and lenders must act on reviewing credit products like overdrafts, credit cards and high purchase in order to reduce the number of people inadvertently trapped in a vicious cycle persistent problem debt, while the government must support affordable alternatives to affordable credit.”

Greg Stevens, CEO of the CCTA, said “Consumer credit growth has slowed dramatically. This might be what the debt campaigners want to see, but it is a cause for serious concern for millions of consumers who use credit to keep their budgets on track. It is a canary in the mine that something is not right, and that the Bank of England’s and the financial regulator’s assault on the consumer credit market is starting to bite deeply.”

“Under the weight of regulatory pressure, many non-prime lenders have been forced out of the market, leaving consumers with fewer formal options for borrowing. This is our reading of these figures. The people this hurts most are the mass market of consumers with limited sources of responsible lending. Yet the drumbeat from the debt charities for more restrictions goes on; they want to see less access to not only short-term lending, but also overdrafts and medium-term sources of credit too. The figures warn of the negative impact this has on both consumers and the economy. It is time for some recognition that the regulatory tide has risen too high and now needs to fall.”