Consumer credit slow

Consumer lending is beginning to slow after a decade of growth, a new study suggests.

According to figures released by Datamonitor, unSecured Loans and borrowing via other forms of consumer credit fell by 4.5 per cent over the course of last year to £207.8 billion.

Maya Imberg, financial services analyst for the firm, said: “A weaker labour market, combined with high consumer debts and weakened consumer confidence, meant that consumers cut down considerably on spending and aimed to repay more of their debts over 2006.”

The study also indicated that the average adult owed some £4,522 in consumer credit debt in 2006, up from the £4,510 recorded in the previous year.

Ms Imberg added those with a poor credit history are likely to find it more difficult to take out a personal loan and could face higher rates of interest as lenders review their pricing tactics for those struggling to make repayments.

Statistics released by financial charity Credit Action indicate that the average Briton owed some £4,550 through unSecured Personal Loans, credit cards, overdrafts and other forms of borrowing as of the end of March.

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