Slowdown in growth of consumer credit

The weakness reflects subdued net lending for other loans and advances – which includes personal loans, overdrafts and car finance, but excludes mortgages – and increased slightly to £0.7bn from £0.6bn in July. Net credit card lending increased to £0.5bn on the month, in line with the average of the previous six months.

The annual growth rate of consumer credit slowed further in August, to 8.1 percent, which the central bank said reflected weaker monthly lending flows. The annual growth rate was the lowest since August 2015, and well below the peak of 10.9 percent in November 2016.

Within this, and, the bank said, consistent with lower monthly net flows over the past few months, other loans and advances growth fell to 7.7 percent, the lowest since December 2014. Credit card growth has been broadly stable for the past 18 months at close to nine percent.

Peter Tutton, head of policy at StepChange Debt Charity said: “With consumer confidence slipping over the summer against a backdrop of uncertainty caused by Brexit, it’s perhaps not surprising that credit growth has continued its downward trend.

“However, credit card borrowing keeps rising in contrast to other loans, and with household savings at a record low, means we must keep an eye out for issues arising out of emergency borrowing to ensure lending remains affordable and sustainable in the long term.”