Consumer credit growth hits three-year low

GROWTH in consumer credit has slowed to its lowest level in more than three years.

Bank of England data, released on Monday, showed that personal borrowing via loans and credit cards was up 7.7 per cent on an annualised basis in September, the lowest rate since June 2015.

It is also well below the peak of 10.9 per cent recorded in November 2016.

On a monthly basis, consumer credit fell to £0.8bn, down from £1.2bn in August, with the decline due to a £0.4bn drop in loans to £0.3bn.

This was attributed to a decline in car finance.

Read more: FCA chief outlines consumer credit concerns

Credit card borrowing was unchanged at £0.5bn.

Mortgage lending also slowed, with the number of approvals for house purchase down 1.2 per cent to 65,269, while remortgages fell 5.5 per cent to 49,169 over the month.

Meanwhile, bank lending to small- and medium-sized businesses increased by just £0.4bn in September, the figures showed.

The Bank of England data follows recent statistics from the Financial Ombudsman Service (FOS), which found that complaints made against consumer credit companies surged during the first half of 2018.

Almost 29,500 grievances were submitted against consumer credit companies in the first six months of the year, according to the FOS.

That equates to an 80 per cent rise from the same period last year.

Read more: Lenders underestimating consumer credit risk, Bank warns