Credit card debts have fallen for first time since July 2013 according the latest Bank of England Money and Credit Banking statistics.
The latest figures show that borrowers repaid £100 million in November, reflecting falling demand for consumer lending. The annual growth rate in unsecured consumer lending dropped to 5.7% from 6.1% in October, as households limited their spending on credit cards and cut back on finance deals to purchase a new car.
Mirroring a slowdown in consumer spending over recent months, the total amount borrowed in November dipped to £600 million, marking the weakest monthly growth in borrowing in six years, and sliding below a £1.1bn monthly average since July 2018.
The net flow of consumer credit was £0.6 billion in November, the smallest flow since November 2013.
Within this total, there was a £120 million net repayment on credit cards, the Bank’s Money and Credit report said.
It marks the first time since July 2013 that a net repayment on credit cards has been recorded and it follows a £413 million increase in October 2019.
The report also said that mortgage market data points to continued stability with lending in the mortgage market continuing to be steady in November, and in line with levels seen over the past three years. Net mortgage borrowing fell marginally to £4.1 billion, and mortgage approvals for house purchase remained unchanged at 65,000.
Mark Gordon, Director of Money, comparethemarket.com said “Mortgage approvals for house purchases in November remained in line with the levels we’ve seen over the last couple of years – around the 65,000 mark. Ultimately, the foundations of the market remain relatively strong and interest rates are still at near historic lows – meaning that there are plenty of good fixed rate deals to be found with 5 year Fixed Rates below 1.5%. Aspiring buyers should consider shopping.”
UK businesses borrowed £0.9 billion of finance in November, below the previous six-month average of £2.3 billion.