Consumer credit climbed £1.2bn in the month, the Bank of England said, in the second month of the government and Bank of England’s plan to boost lending.
Analysts said the rise added to the case suggesting the underlying economy was finally recovering from years stuck in the doldrums.
“This might be a reflection of improved underlying health in the economy,” said Ross Walker at RBS, but Walker went on to warn that the overall lending situation was “anaemic” despite the “signs of improvement.”
September also saw a £0.5bn rise in mortgage lending, the Bank said, as rates on new secured loans slid from 3.84 per cent on average in August to 3.77 per cent in September.
LSL Property Services boss David Newnes called the mortgage market “buoyant”, but said the improvements were not enough. He cited low loan-to-value ratios on available loans, as well as strict capital adequacy requirements as major restrictions on the market’s health.
Rates on new unsecured loans plunged from 7.11 per cent on average to 6.72 per cent on average in the same period. However savers were hit by the falling interest rates, with average returns on new time deposits slashed from 3.01 per cent in August to 2.75 per cent in September.
The business lending data painted a more sombre picture of the market. Lending drooped £0.9bn during September, the data showed, driving the total 3.1 per cent below where it was a year ago.