Consumer credit borrowing increases slightly

Latest Bank of England data have shown that net borrowing of consumer credit by individuals rose slightly to £1.6 billion, from £1.5 billion in the previous month. Within this, net borrowing through credit cards slightly increased to £0.8 billion in July, from £0.7 billion in June. Net borrowing through other forms of consumer credit increased to £0.9 billion in July, from £0.7 billion over the same period.

Simon Trevethick, Head of Communications at StepChange Debt Charity, said “This year has been tough on household finances, with steep rises in the cost of bills and utilities, and a recent rise in inflation, people may be relying on credit to cope. At StepChange not only have we seen more people coming to us for help in recent months, but debt levels continue to climb, particularly in arrears on essential household bills.”

Richard Pinch, Senior Director of Risk, at Broadstone said “The consumer credit market remained buoyant in July, reinforcing strong levels in June as borrowers sought out extra cash throughout the summer holidays.

“Falling rates should keep demand for credit high, particularly in light of continued cost of living pressures and Budget related challenges.

“With inflation proving sticky, concerns around the job market and the Bank of England showing signs of reticence to rush into more rate cuts, lenders must do their best to support the financial wellbeing of their borrowers.”