Customers wary of debt, say banks

Customers repaid more than they borrowed in August. The latest lending figures from the British Bankers' Association (BBA) show that £100 million more was repaid in August than borrowed through loans, overdrafts or credit cards.

The data indicates an attitude of caution to debt among customers - who would generally rather repay old debt than risk taking on more.

However, there was a slight increase in the number of home loans. The number of mortgages approved in August was higher than in July and 14% higher than the same time last year - although mortgage lending is still nowhere near the heights of the past.

In July there were 75,314 mortgage approvals, but in August there were 78,288. Gross mortgage lending totalled £8.2 billion in August - which was 3% higher than in August last year.

The statistics director at BBA, David Dooks, commented:

"The banks' new mortgage lending has ticked up in the past couple of months with higher buy-to-let demand, and some business sectors are edging towards year-on-year borrowing growth, although the general landscape is one of households not wanting to take on more borrowing and businesses waiting for trading conditions to improve before borrowing to expand or invest."