Taking on less debt - February figures

The Bank of England isn`t the only organisation which publishes figures about debt and lending. The Finance & Leasing Association (FLA) also tells us a lot about the amount of consumer credit being granted.

Last year, members of the FLA provided £50bn of consumer credit. That`s just under 30% of all unsecured lending in the country, so the figures give us an insight into a significant portion of the lending going on in the UK.

Its latest figures reveal that lending by FLA members was 6% lower this February than last February, totalling just under £3.5bn.

The biggest fall - as a percentage (30%) - was in second mortgages, but that`s actually the smallest category, accounting for just £19m of February`s lending.

The largest category (credit cards) accounted for £2.172bn of the new debt that was taken on in the month - down 5% on the figure from last February.

As the FLA points out, the fall in lending reflected the slowdown on the high street we`ve heard so much about. Lending on store cards, for instance, fell a full 24% over the year.

Consumer confidence is low, the Association says, but lenders hope that the market will pick up if inflation falls and the Bank of England delays putting up the base rate. Since inflation fell to 4% in March (down from 4.4% in February), they do have some reasons to be optimistic about this.



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