Consumer credit has grown by 6.4% over the year to August, the fastest rate of growth for nearly 10 years according to the latest British Banker Association (BBA) statistics. It is thought the increase has been driven by ultra-low interest rates, people are borrowing more on credit cards and through loans and overdrafts.
The number of people taking out a mortgage fell to its lowest level in August since January 2015, but consumer credit has soared, according to a report by high street banks. The BBA figures showed a total of 36,997 homeowners had their mortgages approved last month, the lowest figure this year, and a drop of 21% on August 2015.
Rebecca Harding, Chief Economist at the BBA, said: “Mortgage borrowing is growing at a slower pace than it has for the last few months reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector.”