Advertisement
UK markets closed
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • CRUDE OIL

    83.11
    -0.06 (-0.07%)
     
  • GOLD FUTURES

    2,254.80
    +16.40 (+0.73%)
     
  • DOW

    39,807.37
    +47.29 (+0.12%)
     
  • Bitcoin GBP

    56,159.11
    +1,185.42 (+2.16%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • NASDAQ Composite

    16,379.46
    -20.06 (-0.12%)
     
  • UK FTSE All Share

    4,338.05
    +12.12 (+0.28%)
     

Bank Sees Fastest Growth In Credit Since 2005

Amid growing concerns about high levels of personal debt, Bank of England figures show the fastest annual growth in lending to consumers for 11 years.

It said lending rose 10.3% year-on-year in June, the highest figure since October 2005, but it expects credit growth to ease in the second half of the year due to uncertainty following Britain's decision to leave the European Union.

The Bank of England said mortgage approvals dipped to their lowest level since May 2015.

Figures dropped to 64,766 in June, compared to 66,722 in May, below analysts expectations of 65,650 and extending a gradual slide in mortgage approvals since the start of the year.

ADVERTISEMENT

Consumer credit meanwhile grew by £1.8bn, compared to an average of £1.5bn over the past six months, and credit card lending increased by £559m in June.

There are concerns that people are being tempted to over-stretch themselves in the current low interest environment, when borrowing is cheaper.

Figures for people taking out personal loans and using their overdrafts has increased to £1.3bn, the biggest rise since October 2007.

Jane Tully, director of external affairs at the Money Advice Trust, said the results are worrying.

"The continued surge in consumer credit is reinforcing our concern that some households rise being left exposed to financial difficulty, if the economy does indeed suffer in the wake of the EU referendum result," she said.

"Most people are currently able to handle the extra borrowing they have taken on, but a minority are still struggling with the impact of the last decade's squeeze on household incomes.

"This extra borrowing could become even more difficult to repay if there is a halt in the UK's economic recovery."

The Bank of England has signalled it is likely to cut interest rates next week by a quarter point to 0.25%.