The Bank of England consumer credit statistics shows that consumer borrowing has risen by 9.9% in the year to September 2017, now totalling £204 billion. Other highlights from the report include:
  • The annual growth rate of consumer credit has remained broadly unchanged since June, at around 10%. The flow was £1.6 billion in September, also close to its recent average.
  • The net flow of sterling credit remained robust at £9.6 billion in September
  • Lending to households has been growing steadily at around 4% per year

With speculation rising about the Bank of England increasing interest rates, Citizens Advice is urging the Financial Conduct Authority to take action now to help people who are already struggling to repay their debts.

Earlier this month, the FCA revealed that half of people are financially vulnerable and 8 million are already over-indebted. The charity is now calling for the regulator to step in to curb the growth in consumer debt.

Gillian Guy, Chief Executive of Citizens Advice, said “The rise and rise of consumer debt is a cause for alarm at a time when large numbers of people are already in financial difficulty. The FCA must step in to curb the worrying rise in debt – by banning credit card firms from pushing more credit onto people who haven’t asked for it, and compelling them to offer support sooner when it’s clear people can’t pay.

“The FCA’s own research shows that 8 million people are already struggling with debt  – leaving them vulnerable to falling into a debt spiral should interest rates rise or a life change sets them back on their repayments.”

“It’s essential that the regulator and credit card companies act together to prevent people getting stuck with ever-growing debts that they can’t afford to repay.”

Peter Tutton, Head of Policy at StepChange Debt Charity, said: “The continuing growth of consumer credit, and particularly credit card debt, should act as a warning sign about the financial health of households in the UK. Our research estimates that nearly 9 million people are using credit to pay for everyday household expenses, and with the Institute for Fiscal Studies (IFS) pointing out that average real wages are lower than they were a decade ago, more people are at risk of falling behind their everyday bills and becoming trapped in spiralling problem debt.

“The Financial Conduct Authority needs to make sure that increased credit card lending does not push more people into long term debt. Lenders must make robust affordability checks and set minimum repayments to clear credit card borrowing quickly. We are looking for the credit card sector to deliver a clear plan setting out how lenders will help people out of persistent debt and financial difficulties.”