Higher borrowing costs appear to be taking their toll in the United Kingdom as consumer credit fell to its lowest level since the Labour government was elected a decade ago, figures from the Bank of England suggested today.
Growth in consumer credit fell significantly, dropping to a ten-year low of £0.5 billion, from March's £0.7 billion increase. This was well below analysts' forecasts for an increase to £0.9 billion and the second consecutive monthly fall.
Overall total lending, which combines lending on dwellings and consumer credit rose by £9 billion in April, down from £10.1 billion in March.
Net mortgage lending also slowed for the second month running to its lowest level since September 2006, falling to £8.9 billion sterling in April, compared with £9.4 billion in March, which was revised down from the earlier estimate of £9.9 billion.
The April figure is below analyst forecasts for a £9.5 billion rise and lower than the previous six month average of £9.8 billion.
The number of approvals, seen as a key gauge for mortgage lending over the coming months, fell 5,000 to 107,000 in April, its lowest level since September 2005. This is the third consecutive monthly drop.
Since these figures were compiled the central bank has raised rates for a fourth time since August last year, partly to cool the housing market, taking the key repo rate to a six-year high of 5.50 per cent.