Consumer credit borrowing rose again in December despite weaker retail sales in the shops than those seen in November.
Annual consumer credit growth reached 6.6 per cent in December according to the latest figures from the British Bankers Association (BBA).
The data is based on credit card borrowing, loans and overdrafts. The latest rise is thought to have been driven by demand for ever personal loans being offered at ever cheaper interest rates.
BBA figures showed a net increase in consumer credit of ?330 million in December.
The BBA does feel however that economic and political uncertainty in 2017 may lead to a more conservative outlook by consumers.
Rebecca Harding, the BBA’s chief economist, commented: ‘Overall, we’ve seen high levels of consumer and business borrowing, although there are early indications that 2017 could see softer demand for credit from business and households, as they anticipate future interest rate rises and wait for further clarity on Brexit.’
Gross mortgage lending in December was ?20.4 billion according to separate data from the Council of Mortgage Lenders (CML). This brought mortgage lending for 2017 to ?246 billion, showing a 12 per cent increase from 2016 and the highest annual lending since 2008.
The cost of servicing debts compared to household income remains much lower than in 2008 however, so there would need to be a significant rise in interest rates to raise that cost to similar levels.
The Bank of England continues to monitor personal debt levels.