Consumer credit growth slows to 18-month low

CONSUMER lending grew at its slowest pace in 18 months in October, Bank of England data shows.

Figures from the Bank show annual growth in consumer borrowing slowed to 9.6 per cent in October, the slowest increase since April 2016. This was down from a 10 per cent high in August and 9.8 per cent in September.

Consumer lending rose by £1.451bn last month, below consensus forecasts of a £1.5bn increase.

Meanwhile, growth in credit card borrowing fell on a three-monthly basis from nine per cent to 8.6 per cent, while annual growth slipped from 9.2 per cent to 8.7 per cent.

The figures may go some way to assuage concerns about a boom in consumer credit. The Bank of England increased interest rates earlier this month in a move seen as an attempt to curb spending.

Read more: Lenders underestimating consumer credit risk, Bank warns

Read more: FCA chief outlines consumer credit concerns

Peer-to-peer lenders have also responded to the changing consumer credit outlook. For example Zopa scaled back higher risk lending in August due to higher consumer default and insolvency levels.