Consumer credit growth shoots back up after March slowdown

PERSONAL loan borrowing and credit card spending through the main high street banks returned to growth in April after a decline in March.

Data from banking trade body UK Finance shows annual growth in personal loan borrowing shot back up to 10.8 per cent in April after a 33 per cent decline in March, while credit card spending was up 9.8 per cent annually after a 1.2 per cent drop a month before.

This put new personal loan borrowing at £1.6bn in April and credit card spending at £10.2bn.

The amount held in current or savings accounts was also up annually by 1.4 per cent to £842.3bn, but was below the previous six month average of two per cent.

Meanwhile, the amount held in cash ISAs was down five per cent to £157.1bn.

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Separate data on mortgage lending showed approvals for house purchase were up 1.7 per cent in April to 40,564. Approvals for remortgages were up 29.6 per cent to 28,390.

“April saw steady growth in mortgage lending and approvals, following a slowdown in activity the previous month,” Eric Leenders, managing director of personal finance at UK Finance, said.

“This was driven by strong remortgaging levels, as borrowers locked into attractive deals amid expectations of a base rate rise.

“Card spending has strengthened following a subdued March. Despite the recent fall in inflation and the squeeze on household incomes starting to show some signs of easing, consumer confidence remains relatively low.”

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