Rampant consumer debt starts to slow

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Rampant consumer debt starts to slow

Consumer debt showed signs of slowing during December, with unsecured lending rising at its slowest rate for three years.

Figures from the Bank of England showed that borrowing through loans, overdrafts and credit cards increased by £834 million last month, an increase of just 0.5 per cent on November.

The latest figure marks a dramatic fall from November's £1.44 billion leap and is nearly half October's rise of £1.63 billion.

However, total advances for December reached £17.44 billion, the fourth highest figure on record.
Increases in credit card lending were particularly weak, rising by just £135 million, compared with a jump of £475 million in November.

Mortgage lending growth also slowed but remained relatively buoyant, rising by £7.28 billion against £8.6 billion in November.

Mortgage approvals - loans agreed but not yet made - fell back a touch to 121,000, from November's record 124,000. However, the figures still suggest a strengthening housing market.

The fall in consumer borrowing rates follows last month's decision to raise interest rates by a quarter per cent.

In light of increased consumer confidence and a strengthening economy, the Bank's Monetary Policy Committee is expected to raise interest rates again next month.

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