Record fall in consumer borrowing says Bank of England

Consumer borrowing – excluding mortgages – recorded its biggest month on month fall since Bank of England records began in 1993.

This adds further evidence to the likely trend of people paying off loans rather than saving more during a time of low interest rates.

Unsecured loans fell by £713m in October compared with September.

But the number of mortgages approved for house purchases rose for the 11th month in a row in October.

The number of homeowners remortgaging remains subdued.

Debts repaid

Borrowing on credit cards rose by £134m in October compared with September, but was more than offset by the record fall of £713m in other forms of consumer credit such as bank loans, loans for cars, and hire purchase agreements.

It was the fourth month in a row that people repaid more than they took out in non mortgage borrowing.

The total stock of outstanding unsecured loans stood at £228bn – a similar level to January 2008.

Separate figures from the Building Societies Association (BSA) showed that there was a net outflow of savers’ funds for the eighth consecutive month.

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