The Bank of England latest figures has revealed that consumer credit increased by £0.8bn in September. This was less than in August, as new borrowing for car finance fell sharply.
Consumer borrowing grew at its lowest rate for three years last month after car sales dropped 20 percent, The annual growth rate of consumer borrowing hit 7.7 percent last month, the lowest it’s been since June 2015, and far below the 10.09 percent growth rate in November 2016.
Meanwhile, the flow of mortgage lending increased to £3.9 billion in September, following two relatively weak months.
Howard Archer, chief economic advisor to the EY Item Club said “Even allowing for the impact of weakened car sales, due to special factors, September’s data reinforces the impression that consumers are currently relatively cautious in their borrowing while lenders have become warier about advancing unsecured credit,”
“We suspect that the housing market will be relatively lacklustre over the coming months – although there are varying performances across the regions with the overall national picture dragged down by the poor performance in London and parts of the south-east.”