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Borrowing levels weakening, says BBA

The levels of both consumer and mortgage borrowing were relatively weak during December of last year, according to the latest data from the British Bankers' Association (BBA).

Amounts lent out as mortgages by the UK's high street banks in December were 500 million below the average levels of the previous six months, which the BBA has attributed to the impact of the so-called credit crunch.

Christmas tends to be a busy time of year for money lenders around the country, but borrowing over the festive season in 2007 has been described by the bankers' association as "muted".

David Dooks, the BBA's statistics director, said: "Mortgage lending weakened notably in the second half of 2007 as the credit crunch impacted on banks' ability to lend.

"At the same time, demand for mortgages also softened in the face of increased borrowing costs and lower disposable income."

Meanwhile, Sainsbury's Bank estimated recently that almost 18 per cent of all consumer spending over Christmas was funded by credit cards.