The annual growth rate of consumer credit slowed in July, to 8.5% but remains elevated relative to 2009-12 according to the latest lending figures from the Bank of England.

Households borrowed an additional £3.2 billion secured against their homes in July. Net lending has been relatively stable over the past year but this was the lowest amount of monthly secured lending since April 2017. Whilst net lending to businesses increased to £2.7 billion in July, but this was primarily driven by the public administration and defence industry.

There was a modest dip in the number of home loans approved for both house purchase and remortgaging in July, The figures show that home loans worth a total of £20.8bn were approved in July. This accounts for £12.1bn for house purchases, down from £12.2bn the month before. This though remains above the previous six-month average of £11.9bn.

The figures show a more significant decline in remortgage activity in July. A total of £8bn was approved for remortgaging, a decline on the £8.6bn approved in June. This is below the previous six-month average of £8.4bn.

Responding to the latest Bank of England Money and Credit statistical Peter Tutton, Head of Policy at StepChange Debt Charity said “The slowing rate of credit growth in July perhaps reflects two themes. Consumer confidence has been fragile over the summer months and this may be reflected in less demand for credit, for bigger ticket items in particular – and with continuing economic uncertainty ahead, this lack of confidence may continue. Over the same period, lending criteria have tightened, which we hope is a reflection of an increasing market focus on sustainable lending, following the FCA’s work around creditworthiness and affordability.”

“This is all against a background of 3.4.million people struggling with serious problem debt and 1.4 million people having to use high-cost credit for household expenses.”

Gillian Guy, Chief Executive of Citizens Advice, said “The level of consumer credit is still growing quickly so it is important the Financial Conduct Authority makes sure lending is affordable. However, not included in these figures is the £19 billion of hidden debt households across the UK owe to councils, government and essential service providers such as utility companies.”

“Policymakers have been rightly concerned about the scale of consumer credit debt, but there is an air of institutional indifference as far as household bill debts are concerned. The government can only start to get a proper understanding of people’s financial difficulties once it starts to measure this kind of debt more accurately and publish that figure annually.”