It seems Britain is becoming a nation of savers once again. Growth of expensive unsecured consumer
credit cards has shifted down by 2%, while the growth in
personal loans and overdrafts has risen by 0.5%.
The British Bankers Association said new spending on
credit cards continued to decline in January, reaching a 3.7% year-on-year decline, with total consumer credit contracting 1.8% over the last 12 months. There has also been a decline in
mortgage lending, with the value of
mortgages advanced down by 26%, at £8bn.
Money deposited into
savings accounts, by contrast, showed a 4.7% year-on-year increase. The BBA statistics director, David Dooks, said: "After the Christmas period, demand for consumer credit was weaker in January, as people shied away, or were discouraged by the weather, from retail spending and held on to their deposits."
Howard Archer, chief UK economist at IHS Global Insight, said the figures showed Britons were prioritizing savings and debt repayments. He commented: "Elevated and rising debt levels mean that there is an urgent need for many consumers to improve their balance sheets, while still serious concerns over jobs and the economic outlook are causing a substantial number of people to want to save more."
