Value of personal loans falls by £400m in August

By Daniel Culpan

Total lending to individuals in August this year (not including student loans) fell by £400 million, marking a significant drop from the previous six-month average increase of £700 million, according to the latest lending figures from the Bank of England.

The data, released yesterday, shows that within total lending for August, loans secured against borrowers' homes - such as mortgages - fell by £300 million. Again, this reveals a steep drop from the previous six months, when this figure increased by an average of £700 million.

Lending on consumer credit, such as credit cards and other types of loans, also dropped during this month - by £100 million. Credit card lending remained broadly flat, while other loans and advances fell by £200 million.

The figures appear to show the ongoing impact of the financial downturn and the reluctance of many banks to lend in the current climate.

Howard Archer of IHS Global Insight commented: "The Bank of England data indicates that consumers' appetite for taking on new borrowing is limited, while there is also an ongoing strong desire of many consumers to reduce their debt."

Tags: loan, personal loan, Bank of England

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