British consumers' appetite for debt remained high in February despite the Bank of England's interest rate hike at the start of the month, an index published by HSBC bank showed today.
The HSBC index has been designed to provide a measure of consumer financial confidence based on data collected from around 1,700 branches across Britain.
The non-seasonally adjusted index stood at 163 in February, eight per cent higher than the 151 recorded a year earlier. The index had stood at 132 in January.
"This index shows there was little immediate reaction to the latest rate rise. If this trend continues in coming months, interest rates could rise faster than we or the financial markets currently expect," said Mr John Butler, UK economist at HSBC.
The BoE raised interest rates for the second time since November at the start of the month, taking them to 4.0 per cent, partly to cool burgeoning consumer debt levels and a booming housing market.
The breakdown of the HSBC index showed that borrowing confidence was higher for home equity withdrawal and personal loans but especially so for mortgages, suggesting the housing market is likely to remain strong over the coming months.
In the three months to the end of February, total credit inquiries were up nearly two percent on the same period a year earlier.