Rising borrowing points to a more optimistic consumer
David Dooks, statistics director at the BBA, said: “When customers feel more optimistic about the economic outlook they are much more likely to take on new borrowing.
“Today’s figures show that mortgage lending in August was up 15% on last year and that credit card spending remains robust. But I was particularly struck that after years of decline, demand for unsecured personal loans is rising quite strongly again.
“Those products are often used to finance bigger purchases such as cars or major home improvements – the sort of spending we often put off until we feel confident about our financial circumstances.”
Key points:
– New mortgage lending is 15% higher year-on-year and approvals for house purchase are 6% up, but remortgaging and equity release borrowing are both down compared to August 2013.
– This year’s saving in ISAs and NISAs (the new individual savings accounts with higher investment limits) is running below investment levels over the same period last year.
– Sustained growth in business borrowing is showing up in the manufacturing, retail and wholesale sectors.
