Return to credit could result in debt management plans
Return to credit could result in debt management plans
Thursday 4th February 2010
The Bank of England has revealed that new borrowings outstripped the amount being paid back by consumers for the first time since June.
Consumer credit increased by £0.1 billion in December, above the previous six month average of a net repayment of £0.3 billion.
Credit card lending increased by £0.2 billion, but other loans and advances fell by £0.2 billion, according to the report.
Total net lending to individuals was reported to have increased by £1.2 billion during the month.
Global Insight spokesperson Howard Archer told the Evening Standard that the rise in consumer credit was largely due to Christmas spending.
"It is likely that the very modest rise in unsecured consumer credit in December was the consequence of a significant number of people cutting back on their net repayment of loans and other advances during the month in order to help pay for their Christmas celebrations," he said.
Previous research highlighted a growing trend among consumers to focus on debt management in the face of rising costs such as inflation and higher taxes.
A recent study by Birmingham Midshires reveals people have increased the amount they are saving on a quarterly basis by 136 per cent, compared to the same time last year.
In the three months to January 2010, people saved an average of £776, compared with £329 during the same period last year.
News article brought to you by Debt1 - UK Debt Management Specialists
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