Consumer credit borrowing fell by its steepest annual rate in October since figures began, the Bank of England said today (Nov 30).
Non-mortgage borrowing – including credit cards, overdrafts and personal loans – fell by 5.6 per cent, which was a new low since the Bank’s data started in 1994.
Households have repaid £15.6bn of consumer credit since the beginning of March.
Non-mortgage lending to consumers stayed weak in October, with households making net repayments of £590m.
The weakness was driven by a net repayment on credit cards, the Bank added. Some £449m was repaid on credit cards in October.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: ‘Households appear to be using the excess savings that they have accumulated this year to pay off debt when loans come to be refinanced.’
He added that banks had also been restricting access to consumer credit, with the typical personal loan rate increasing to 5.15 per cent in October.
The typical cost of credit card borrowing in October was pretty much unchanged at 17.96 per cent.