Caution rules on high street as borrowers look to repay debts

APPETITE for borrowing has dropped in 2011, data from the Bank of England revealed yesterday.

Consumer credit showed a net repayment of £333m in January, appearing to reflect caution on the high street, and people’s desire to reduce personal debts.

Net borrowing had averaged around £200m over the previous six months, while in December credit had risen by £793m.

“December’s rise in credit likely reflected people borrowing modestly to buy Christmas presents and celebrate the festive season,” commented Howard Archer of IHS Global Insight.

Credit card lending increased by £75m in the first month of the year, but other loans saw a net repayment of £407m.

The decline caused the 12-month growth rate in consumer credit to slip to £0.8bn, from £1.1bn in December.